International Egg and Poultry Review - By the USDA's Agricultural Marketing Service - This is a weekly report looking at international developments concerning the poultry industry, this week covering poultry production in Kuwait, Australia and South Africa.

Kuwait

Chicken meat is gaining popularity over red meats in Kuwait because of increased consumer health awareness and because of price. The BSE scare in Europe and the ecological problems Kuwait’s seafood industry faces helped shift consumption toward poultry meat at the expense of red meats and seafood. In addition, the presence of coalition troops in Kuwait and nearby Iraq since early 2003 are also driving demand for poultry meat.

Previously, Kuwaiti poultry meat re-exports were insignificant, always less than 1,000 metric tons (MT) per annum. However, since the Iraqi liberation by coalition forces, several Kuwaiti firms are now supplying the Iraqi market. An estimated 2,000-3,000 MT of frozen poultry meat, particularly whole chickens and leg quarters are expected to be reexported to Iraq during 2003. Since early 2003, demand for U.S. chicken parts increased substantially due to the large number of coalition troops stationed in Kuwait and nearby Iraq. This trend is expected to continue and probably increase in 2004, if peaceful conditions prevail in Iraq. However, the troop level has stabilized, thus demand from this segment is not expected to expand. In 2004, the United States is expected to supply about 2,000-3,000 MT of boned chicken parts, including leg quarters. The U.S. leg quarters will primarily be re-exported to Iraq..

Expatriates, particularly those in the lower income bracket (i.e. laborers), prefer the cheaper imported frozen whole chicken. Specifically, they prefer the smaller-sized (900 1,100 grams), whiteskinned, individually wrapped frozen chicken. Brazilian, Saudi Arabian and European chickens are more popular than U.S. chickens because they meet these market requirements better and the perception in Kuwait that Brazilian producers adhere more to correct Islamic Halal slaughter practices. Brazil and European brands are also aggressive in marketing and more price competitive than the U.S. In the absence of an EEP program, U.S. whole chicken prices would are not competitive with imports from Brazil, France and Denmark.

Brazil and the U.S. share the bone-in chicken parts market, estimated at about 8,000 metric tons annually. Brazil is gaining market share by addressing consumer requirements for smaller parts packed in attractive retail trays. Brazil’s share of the chicken parts market now stands at 65 percent, compared to 35 percent (or about 2,500-3,000 MT) for the United States..

Turkey imports, mainly from the U.S. and, to a lesser degree from France and Brazil, are steady at 150 MT annually. Turkey consumption is seasonal and concentrated mostly during the November-December holiday season. Duck imports, mainly from the U.S., France and Canada, are estimated at 80 tons annually. Cornish hens, exclusively imported from the U.S., are estimated at 10-15 MT.

Source: Foreign Agricultural Service/USDA

Australia

Australia’s egg producers have been hit with a double whammy – a drought and new layer hen housing standards that were passed in 2000 and are taking effect now. The new layer hen housing standards, amongst other things, require space in cages for birds of 550 sq cm each, new sloping floors in poultry houses and fold down doors for the front of the cages.

Some organizations have said that up to 85 percent of South Australia’s producers could be forced out of the market because of the additional costs. In order to prevent farmers from exiting the market place, up to 25-50 cents needs to be added to a dozen eggs.

Various news sources

South Africa

South Africa produced about 760,000 tons of broiler meat, excluding offal, in 2002, up from 730,000 tons in 2001. Expectations are that 2003 production will reach about 790,000 tons. The industry is thus still showing healthy growth in spite of a lackluster economy. Poultry meat imports amounted to 24,000 tons in 2002, up from 17,000 tons in 2001. Total poultry product imports amounted to more than 80,000 tons of which 70% consisted of offal (mainly feet) and Mechanically Removed Meat (MRM). Brazil supplied more than 56% of total imports. The U.S. exported 1,245 metric tons in 2001 and 2,052 metric tons of various chicken items to South Africa.

In July 2000 a provisional payment in relation to an anti-dumping duty was instituted against US poultry products. The duty on tariff # 0207.1490 bone-in cuts amounted to R2.24/kg. on products from Tyson Foods, R2.45 c/kg. on products from Gold Kist Inc. and R7.25/kg. on products from other manufacturers. This was promulgated in December 2000 and is still applicable.

In June 2003 the South African poultry producers launched another anti-dumping application. The request is for an increase in the duty on whole birds (0207.12) from 27% ro 40% and on bone-in chicken portions (0207.1490) from R2.20 to R4.40/kg. In addition, a new duty on offal (0207.1420) of R2.20/kg. is requested. The duty application is for product from all sources and not only the US. The application is still being investigated by the new International Trade Administration Commission (ITAC), which replaced the former Board on Tariffs and Trade (BTT).

Although turkey product imports are allowed in duty free, imports are also small and consist mainly of mechanically removed meat. Only about 1,000 tons of whole birds were imported in 2002 of which Brazil supplied 920 tons. The U.S. exported to South Africa 1,211 metric tons turkey meat in 2001 (8% of total turkey meat imports) and 1,761 metric tons in 2002 (13% of total turkey meat imports). Brazil had 43% of the total in 2001 and 40% of the total in 2002.

Source: Foreign Agricultural Service/USDA

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Source: USDA's Agricultural Marketing Service - 16th September 2003.