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 looking at Romania.

Romania

Even though the European Union (EU) accounted for 53% of Romania’s agri-food imports followed by the US at 8.9%, the United States (US) is the top supplier of poultry meat making up roughly 50% of the country’s imports. For the US, Romania is considered one of the top 15 broiler parts export markets. What has helped to continue make Romania an attractive market is the change in monetary policy from an exchange rate to an inflation targeting regime in 2005 resulting in a stronger currency.

The change in monetary policy is also being used in preparation for EU accession. The Lieu, Romania’s currency, was also redenominated to encourage price stability and facilitate the future conversion to the Euro. Romania has the ultimate goal of joining the EU in 2008 and is adopting the needed legislation to accomplish this at a rapid pace. It is anticipated that once Romania harmonizes its veterinary requirements with the EU all US exports will be banned to the country starting August 5, 2006. There are no US plants currently approved to export to the EU.

Romania has also created a new import schedule valid from February 16 through December 31, 2006. Tariff rates for two poultry products, defined by codes 0207 1420: for chicken halves and quarters, and 0207 1460: chicken leg halves and quarters, were temporarily increased for 6 months from February 16-August 15 to 70% from 45% in 2005. The situation was justified by authorities by the special situation triggered on the domestic market by the highly pathogenic avian influenza (AI) outbreaks. Even though total poultry meat imports decreased by 6% the first quarter of 2006 partly in response to the higher tariffs, US origin product increased 2%. However, monthly poultry imports from the US are still lower when comparing March, 2006 volume of 7,586 metric tons (MT) to the September, 2005 volume of 10,869 MT before the first AI outbreaks were discovered.

Since October at least 75 sites in Romania have been contaminated with H5N1 AI with at least a half million birds being culled and some noting up to 1 million might need to be culled in order to bring it under control. Poultry meat and products totaling 325 metric tons from the affected commercial farms have been removed from warehouses and retail chains. According to representatives of retail chains, poultry meat consumption decreased by 50-80% during the first days of the outbreaks and domestic producers claimed sales declined dramatically and storage space quickly filled up. Under the circumstances, the Ministry of Agriculture, Forestry and Rural Development has announced that it has considered increasing the current subsidy level given to domestic poultry producers.

Meanwhile, H5N1 has been confirmed in the capital city of Bucharest in the second district where there are more than 400 households and up to 4,400 chickens. The result is 13,000 people have been quarantined and 40 streets blocked off in Bucharest. The spread was possibly due to 1 farm selling live chickens without permits. Authorities have instituted a nationwide ban on the transport of poultry. The director of the veterinary agency and his deputy have been fired for failure to react properly in stopping the bird flu. Three others have been arrested for allowing a farm to sell chickens possibly infected with AI.

The EU had approved a resumption of poultry imports about 1½ months after the first out break in October, 2005 along the Danube River delta. The EU then re-instated the ban in May, 2006 until the end of the year with the start of the second outbreak of AI. The second outbreak comes as the country waits on a decision form Brussels on its joining the EU. EU officials have already expressed concerns about food safety in Romania along with organized crime and corruption. Romania also needs to improve collection and treatment facilities to meet EU food guidelines TSE and animal by-products. Sources: USDA/FAS and numerous news sources.

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Source: USDA's Agricultural Marketing Service - 30th May 2006