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Hong Kong Poultry and Products Annual 2006

by 5m Editor
17 September 2006, at 12:00am

By the USDA, Foreign Agricultural Service - This article provides the poultry industry data from the USDA FAS Poultry and Products Annual 2006 report for Hong Kong. A link to the full report is also provided. The full report includes all the tabular data which we have ommited from this article.

Report Highlights:

In the first half of 2006, Hong Kong imported a total of $211 million worth of chicken products plus $75 million worth of chicken feet. Compared to the corresponding period in 2005, value and volume increased by 22 percent and 23 percent respectively. The significant increase has been brought by a robust increase in re-exports coupled with stable domestic demand. Imports of chicken products to Hong Kong, re-exports excluded, are expected to rise modestly at about 5 percent in 2006, amounting to 234,000 MT.

The biggest challenge for U.S. chicken products is price competition. The U.S. has continued to lose market share to Brazil and China. However, even though low-end retail and HRI outlets have opted for Brazil and China chicken products as a result of competitive prices, high end users still stick to U.S. chicken products, primarily due to quality and food safety concerns. U.S. chicken feet exports to Hong Kong plummeted by 53 percent and 72 percent in terms of value and volume respectively between January – June 2005 and the same period of 2006.

The drop was the result of an import requirement change for U.S. chicken feet effective April 30, 2005. The new regulation requires U.S. chicken feet be only from birds given both ante-mortem and post-mortem inspections. Many existing U.S. plants cannot meet this requirement unless modifications are made.

Situation and Outlook

In the first half of 2006, Hong Kong imported a total of $211 million worth of chicken imports plus $75 million of chicken feet. Compared to the corresponding period in 2005, value and volume increased by 22 percent and 23 percent respectively. The significant increase has been brought by a robust increase in re-exports coupled with stable domestic demand. Hong Kong is a mature market for chicken products. Assuming no avian influenza cases will occur in Hong Kong affecting consumers’ confidence in consuming chicken products, the domestic demand for 2006 will be able to rise modestly by 5 percent, amounting to 234,000 MT. The reason is that Hong Kong consumers will continue to replace freshly slaughtered chickens with chilled chickens from China and become increasingly receptive to frozen chicken parts.

Overtaken by Brazil and China, the U.S. remains the third largest supplier of chicken products to the Hong Kong market. In the first half of 2006, the U.S. exported $22 million worth of chicken products (excluding chicken feet) to Hong Kong, representing a 22 percent decline from the same period in 2005. Based on first half year trade figures, U.S. exports to Hong Kong are forecast to drop from 33,000 MT in 2005 to 29,000 MT in 2006.

The U.S. has lost much of its market share since 2004 following Hong Kong’s ban on U.S. chickens in early 2004. Competitive pricing is the dominant factor in Brazil maintaining its leading position in Hong Kong’s chicken market even when the market is open to U.S. chicken supplies. Hong Kong’s new import requirement for U.S. chicken feet, effective April 2005, is also an unfavorable factor for U.S. chicken feet exports. If U.S. plants do not adjust facilities to make ante-mortem and post-mortem inspection of birds possible, as required by the new requirement, U.S. chicken feet exports could hardly rebound to previous levels. ($42 million and $20 million in Jan-June 2005 and 2006 respectively).

Hong Kong banned live chicken imports from China for 21 days twice in the past six months following two individual human infection cases of H5N1 in southern China. Hong Kong consumers’ confidence in live chicken was adversely affected for a while but soon rebounded. However, the Hong Kong government reduced the daily supply of live chickens to around 40,000 from the original 60,000 quota, after the resumption of live chicken exports from China. The 40,000-supply-quota is equally shared between imports and local supplies.

According to the Hong Kong government’s plan to reduce the risks of avian influenza cases, Hong Kong’s chicken population should be reduced to 2 million from the 2005 level of 3.7 million. Through a year-long voluntary license surrender scheme, which ended in early August this year, the current chicken population has been reduced to 2.2 million. Those farms which have chosen to return the license to the government are required to stop operation within nine months. Hong Kong’s chicken population is expected to be reduced to well below 2 million at the end of the 9-month closing-down deadline for poultry farms who surrendered their license.

To read the full report, including tables, click here (PDF)

List of Articles in this series

To view our complete list of 2006 Poultry and Products Annual reports, please click here

September 2006