Report Highlights

Iraqi poultry production is up markedly in 2010 due to better feed availability and an improving business environment. Overall poultry imports are down so far in 2010, with the decline more than replaced by domestic production increases. US exports of poultry are down by 16 per cent by volume for the first six months of 2010. The full year 2010 forecast of US poultry exports to Iraq is 150,000 metric tons (MT).

Iraqi poultry producers are becoming better organised and are lobbying the government for additional assistance and for restrictions on imported poultry. Access to feed, especially protein (soybean meal) will be a constraining factor on growth in the poultry sector in 2011.

Production

Iraqi poultry production is forecast to increase in 2010 to 230,000 MT. Factors contributing to the increase include increased feed availability, an increase in the number of poultry farms and an improved overall economic environment.

Poultry operations up sharply

The Iraqi Poultry Producers Association (IPPA) reports that the number of poultry farms in operation doubled in the past year. Much of the increase reportedly is not new capacity but rather abandoned poultry houses being reclaimed and brought back into use. IPPA also reports that capacity, as measured by how many broiler chicks an operation can take in one cycle, also more than doubled from about 20 million birds in 2009 to over 40 million in 2010.

Feed

Feed wheat is used extensively in the poultry sector. For the last two years drought has hurt both grain and livestock production. However, near normal rains resulted in a much improved feed availability picture for the 2010 crop. With imports, the total Iraqi feed supply will be 3.6 million MT, up from 2.3 million MT last year. (This figure includes small ruminant and dairy feed as well as poultry.)

Iraq has no domestic sources of vegetable protein, and Ministry of Agriculture import rules and associated fees applied preclude large vessel-sized shipments. Soybean meal imports are limited to small consignments of US or South American meal that is trucked in from neighbouring countries. Limited quantities of Indian soybean meal are imported as back-haul on small costal vessels. Official feed imports for the first six months of 2010 were double that for the same period last year and are expected to be around two hundred thousand metric tons for the full year. However, the overall level of feed imports into Iraq remains modest relative to the size of the market.

The 2011 production forecast is predicated on a similar planted to wheat, modestly increasing protein meal imports, and adequate political stability to continue the rehabilitation of abandoned poultry houses (as is occurring in 2010).

Consumption

Growing Consumer Income Iraq’s per capita GDP has grown in the first half of 2010 and is expected to continue rising in the coming years as oil production expands. Per capita GDP on purchasing power parity (PPP) basis is forecast to increase by $200 to $4,090. Within this income range, the marginal propensity to consume poultry meat increases sharply. Per capita poultry consumption is an important indicator of living standards that have improved markedly since 2003 and growth is forecast to continue in 2011.

Improved business environment

The overall level of political violence has declined in recent years, and Iraqi businesses are becoming more established and experienced.

Long-term demand growth

While Iraq’s current population is just over 30 million, and with the highest fertility rate in the Middle East, its population is expanding rapidly and should total more than 50 million by 2035. Only Saudi Arabia and Iran possess larger proven oil reserves, and oil exports are expected to be the cornerstone to expanding Iraq’s nearly $100 billion economy.

Trade

Iraq has emerged as an important poultry market for the United States, Brazil and Turkey. Brazil typically supplies whole birds whereas US suppliers generally exports chicken parts. Imports from Jordan, Iraq’s third largest supplier, are off by over 80 per cent in the first six months of 2010 due to competition from other suppliers. 2011 imports estimates indicate modest growth in poultry parts due to improving food service demand.

Limited cold storage facilities at Iraq’s main port of Umm Qasr preclude bulk shipments of frozen poultry. Most shipments of poultry come in by container or smaller refrigerated trucks from Kuwait and Turkey.

Policy

The IPPA has been lobbying for increased border protection to limit poultry imports. While no new import measures have been put into place, the Ministry of Agriculture is considering several policy changes that would support domestic producers. These include:

• a production of subsidy 350 dinar (IQD) per bird (US$0.25 per bird) for farms with at least 10,000 birds
• imports of 25,000MT of soybean meal by the State Agricultural Supply Company, and
• supporting private imports of feed by allowing for use of State Agricultural Supply Company grain storage facilities.

Further Reading

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September 2010