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US Poultry Meat Destined for Mongolia

by 5m Editor
25 November 2009, at 7:15am

US - When Mongolia escapes the recession, the market is predicted to have good potential for US poultry meat exports, according to a GAIN report from USDA Foreign Agricultural Service.

Report highlights

The global financial crisis that began in 2008 continues to have a negative impact on Mongolia's economy. Although inflation is down and the local currency is up, livestock herding, which provides a living for approximately 28 per cent of the population, continues to be under stress. In recent months, the herding sector has been most severely affected by a sharp reduction in cashmere and meat prices. At the same time, low local meat prices and increasing poverty, have resulted in a sharp decrease in once rapidly growing exports of US chicken meat that peaked at a record $2.2 million in 2008. In the years ahead, as the economy recovers, Mongolia is expected to become a steady $2-3 million market for US chicken products, especially to Ulaanbaatar, the cities and the mining sector.

Poultry meat import profile

While local production meets virtually all demand for most meat products, Mongolia depends on imports for many other food commodities. Although many diary products are produced and consumed locally, imports are popular in Ulaanbaatar and other major cities because of problems with food security and the cold chain. In 2008, two-thirds of wheat, one-third of potatoes and all rice and vegetable oil were imported. Imports of donated US wheat have played a major role in boosting local supplies. Mongolia has also been increasing its imports of poultry meat, especially from the United States.

In 2008, US chicken meat exports reached a record $2.2 million, up from zero in 2004. Despite high local meat production, US poultry has been a popular item, especially in Ulaanbaatar where there is increasing familiarity with US products. The strongest urban markets are in supermarkets, restaurants and tourist-oriented venues such as bars. Mining settlements, which could eventually house thousands of workers, provide another potentially lucrative market for US poultry.

The most popular items are leg and hindquarters with retail prices averaging around 3,500 tugriks/kg ($1.40/lb).

Outside Ulaanbaatar, sales of US chicken are limited by the undeveloped cold chain and low incomes. In 2009, the rapid decline in local meat prices and discretionary incomes dented demand for US chicken, lowering imports from January to March 2009 to just $171,000. This shift toward less expensive animal proteins is expected to remain as long as the Mongolian economy remains under stress. However, as the country recovers, it is expected to become a $2-3 million market for US chicken meat.

Further Reading

- You can view the full report by clicking here.