China Broiler Weekly - CHINA - Prices of AA broilers rise in Shandong and Liaoning provinces while China breed broiler prices dip (week ended Jul 13, 2005), say eFeedLink in their Weekly China Broiler report.

1. Price summary

AA broiler prices in China's Shandong and Liaoning provinces edged higher in the week ending Jul 13, while those in Henan province slipped. Prices of Chinese special breed broilers continued to fall marginally in recent days.

2. Market analysis

Shandong and Liaoning
Prices of AA broilers rose marginally in Shandong and Liaoning in the past week. Summer temperatures at the two provinces were lower following rainfalls in recent days, facilitating delivery of broilers to other regions. As farmers have sold a large number of broilers in earlier period due to the warmer weather, supplies were tight lately, causing prices to edge higher. Faced with export restraints and market competition from AA broilers in Anhui and Jiangsu provinces, the margin of price gains in Shandong was smaller than that in Liaoning.

Henan
AA broiler prices in Henan dipped in recent days. Farmers had been very eager to replenish their farm inventory in earlier period. Thus, when the number of broilers released into the market significantly increased in view of warmer weather, supply outstripped demand in the region. However, inventory replacement was seen to improve in the weeks ahead.

Prices of fast growth Chinese breed broilers weakened due to competition from AA broilers. Prices of medium growth broilers were generally stable in the past week.

Guangdong and Guangxi
Temperatures in Guangxi and Guangzhou rose rapidly after floodwaters subsided in recent days. This was seen to have a bigger impact on the growth of fast growth broilers that were about to be released into the local market. Thus, most farmers have chosen to sell their stocks into the market earlier, leading to supply outstripping demand here.

Furthermore, as this period was the peak season in farming, broiler consumption has declined compared with the past two weeks. Prices of fast growth broilers were most affected by the fall in demand, while the impact was less severe for prices of medium and slow growth broilers.

In Guangxi, apart from providing supplies to some food enterprises in Guangdong contracted under long-term arrangements, medium and slow growth broilers were mainly sold for domestic consumption. Thus, prices in Guangxi were marginally higher than those in Guangdong.

3. Market forecast

AA broilers: Continued export constraints, sluggish domestic demand, unpredictable warm and cool weather conditions which have a negative impact on broilers' growth will all bear on the market. Additionally, with the ongoing outbreak of diseases that have a more serious effect on AA broilers, analysts expected prices to remain on a downtrend in the near term.

Chinese special breed broilers: Most major farms still have high interests in replenishing their farm chick inventory in recent days. However, with farmers actively engaged in crop cultivation, the number of broilers slaughtered in abattoirs has fallen, resulting in lower consumption and lighter trade. Coupled with the influence of epidemic diseases, analysts expected prices of Chinese breed broilers to move lower in the coming weeks. The extent of price falls in fast growth broilers was also seen to be wider than those of medium and slow growth broilers.

Source: eFeedLink - 14th July 2005