FAO expects flu to dent global poultry trade

The United Nations Food and Agriculture Organisation (FAO) has lowered its projections of global trade in poultry products in 2006 in view of the sharp decline in consumption following widespread incidence of avian influenza (bird flu).

The latest projections put the likely world trade in 2006 at 8.12 million tonne against the earlier anticipation of 8.6 million tonne. The poultry product trade in 2005 was around 8.0 million tonne, reflecting a growth of 10 per cent over the previous year's level.

The decline is attributed solely to the drop in the consumption of poultry products as the consumers the world over are looking for alternatives to poultry because of the bird flu.

Unlike in 2004 and most of 2005, when the bird flu-driven consumption impact was largely restricted to the Asian region, the detection of the disease in over 12 countries in February 2006 has resulted in immediate and pronounced consumption decline in importing countries in the Europe and Asian countries, the FAO has pointed out.

The total world consumption of poultry meat in 2006 is now projected at 81.8 million tonne, down about 3 million tonne from the previous estimate of 84.6 million tonne. Significantly, the 2006 consumption is projected to be lower than 82 million tonne in 2005.

However, the impact of the bird flu on global prices of poultry products has been strikingly different this year from that in 2004 when H5N1 infection was reported in some Asian countries. The bird flu epidemic then had led to an eight per cent decline in global trade but a whopping 30 per cent increase in international prices of poultry products.

But this year, in contrast, the plummeting of consumption is progressively lowering the global prices of poultry products irrespective of whether the disease outbreak is in the wild birds or in commercial flocks. "This will affect industry profitability negatively and erode household livelihood and rural employment opportunities around the world", the FAO has cautioned.

The decline in international prices is creating uncertainty among the exporters of poultry products. In the US, one of the major exporters of poultry meat, the export prices for broiler parts, after rising to record levels in October 2005, have dropped by 13 per cent due to weakening of export demand. In Brazil, where about 30 per cent of the total poultry output is exported, the prices of the day-old chicks are reported to be down 50 per cent.

In Europe, a major importer of poultry meat, the response of consumers to the bird flu threat has varied in different countries. While the consumption declined by a whopping 70 per cent in Italy in the middle of February, it fell only by 20 per cent in France and merely 10 per cent in northern Europe.

"The impact of the bird flu crisis is not limited to poultry sector alone but has ripple effects into other sectors, with the $ 42-billion feed sector in Europe citing demand losses of up to 40 per cent in some countries", the FAO has pointed out.

The duration of the negative market impact of bird flu will depend on erratic consumer perceptions of the likely human health hazards of the disease. "These concerns will be heavily influenced and shaped by government risk communication strategies and media coverage which should emphasis the safety of eating poultry products when properly cooked," the FAO has categorically states.