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Poultry Firms Hit by H7N9 Virus

25 July 2013

CHINA - The latest case of H7N9 confirmed on 20 July in Beijing is expected to delay further the financial recovery of poultry-related companies.

The 61-year-old female patient from Langfang, Hebei province, is still in a critical condition after being infected with the virus, which was the only diagnosed case in China in July.

In April, the government closed many markets in some areas, including Zhejiang and Jiangsu provinces, to prevent the spread of the disease. They began to reopen from the end of June.

The total losses of poultry-related companies all over the country up until the end of June exceeded 600 billion yuan ($92.2 billion) since the first case of H7N9 virus was discovered by the authorities at the end of March, according to the latest statistics from the National Poultry Industry Association.

"The monitoring system of updated figures on losses was shut down and poultry markets gradually started to reopen at the end of June because there were no more new cases discovered until 20 July," said Liang Zhong, an officer in charge of the pigeon industry at the National Poultry Industry Association.

Mr Zhong added the association would wait for responses from businesses on the further effects of this latest case to decide whether the monitoring system would restart.

The previous outbreak brought the industry to a standstill because fewer people were willing to buy poultry-related products. It led to a sharp fall in the prices of chickens, pigeons, ducks and even eggs.

The average selling price of a pigeon dropped from 11.5 yuan in March to its current 6.5 yuan while the price of chicken dropped from 12 yuan a kilo to 4 yuan.

"There was a slight recovery in prices from the end of June when the poultry markets were gradually reopened in Zhejiang and Jiangsu provinces but the newly found case would probably bring about another slowdown in the industry," said Mr Zhong.

Because all poultry stands were shut down between April and June in the regions where people were found to be carrying the H7N9 virus, the breeders, suppliers and sellers of poultry are keen to make up the huge losses as soon as possible.

Although poultry markets - but not those where birds were slaughtered upon request - were reopened, poultry breeders are still suffering hard times with very few people willing to buy chickens from them.

"Because live poultry-slaughter stands in the city are still temporarily shut down we haven't seen any growth in the sales of chickens to make up for our huge losses yet," said Ye Enlin, managing director of the Wenzhou Minxin Poultry Cooperative in Tengqiao village, Wenzhou, Zhejiang province, an area well-known for smoked chicken products.

Ye lost nearly 3 million yuan between March and June and was forced to slaughter and freeze more than 1.2 million chickens valued in excess of 12 million yuan during the period.

"The partial reopening of the poultry market enabled me to sell only 15 per cent of the frozen chicken stock. I'll now probably be affected again by the newly confirmed case of the H7N9 virus," said Ye, who used to buy 200,000 to 300,000 baby chickens for breeding purposes every month. He bought just 20,000 to 40,000 a month between April and July.

Mr Enlin added that he might shut down the cooperative if the situation in the live poultry industry doesn't recover rapidly by the end of the year because he won't have enough money to survive.

Sales of chicken dishes in restaurants also dropped rapidly between April and June because of fears about the virus.

Xiao Nan Guo Restaurant Holdings Ltd suffered an 80 per cent decrease in the sales of chicken dishes between April and June. They have slowly recovered to between 50 to 60 per cent of pre-virus figures.

"The newly found case of the H7N9 virus should be a one-off because the current hot weather is not the peak season for the spreading of viruses," said Huang Wei, media manager for Xiao Nan Guo.

Listed companies related to the live poultry industry faced huge losses, as expected.

According to the half-year report released on July 15 by Fujian Sunner Development Co Ltd, a leading chicken product supplier in China, the company suffered losses of about 239 million yuan in net profit, down 295 per cent annually.

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