Prices of China breed broilers in Guangdong province and Guangxi Zhuang Region rose sharply while in Jiangsu province, AA broiler prices made impressive gains.

Market analysis

China's broiler prices were higher in most regions except Sichuan province.

In Guangxi and Guangdong, prices of China breed broilers made sharp gains on account of the following: Supplies were low while demand from buyers in Hong Kong and Macau rose in the run up to Dragon Boat Festival--a Chinese festival celebrated with the eating of meat-filled dumpling.

Three days prior to the festival, daily delivery to these two territories hit 50,000, which was way above the normal supply of 20,000 birds per day. Prices of AA broilers in Jiangsu rose significantly compared with the previous week. Broiler producers there have managed to bring in profit, which averaged RMB2 per bird, with the highest at RMB3 per bird.

Factors that have contributed to the price gains in Jiangsu include upward price adjustments by traders concerned that they would not be able to procure broilers for reselling prior to the Dragon Boat Festival.

Many market participants, however, felt that the significant price gains in the week under review may not be sustainable in the long term unless demand stays consistently firm.

Market forecast

In the week after the Dragon Boat Festival, broiler consumption is seen to decline with the warmer weather. However, overall broiler supply is likely to stay low and this will provide support for prices.

Prices of China breed broilers are seen range-bound while AA broiler prices are likely remain firm following sharper gains in Jiangsu's prices.