US Chicken Feet Kicked Out of China

GLOBAL - China and the United States are kicking up a trade war over chicken in which Beijing effectively has given the boot to millions of dollars worth of US chicken, about half of which is chicken feet.
calendar icon 9 July 2009
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This action comes as Congress begins deliberating the 2010 federal budget for agriculture, which could extend a US ban on imports of Chinese chicken products sparked by food safety concerns, reports The Star.

The ban has angered the Chinese and now, according to US exporters, Beijing has halted imports of US chicken, although officially China is saying imports are not blocked.

China is a huge market for US chicken feet, commonly called paws, and bought 421,000 tonnes, or US$280mil worth, in 2008, according to the USA Poultry and Egg Export Council, a trade group.

In China, paws are popular in soups, stews, and as snack items, but very few are sold in the United States.

Without the Chinese market, most of the paws will have to be processed into feed or other non-food uses, which brings less money to US chicken companies.

In a note to clients last week, Stephens Inc analyst Farha Aslam said earnings for chicken producers Tyson Foods Inc or Sanderson Farms Inc would be impacted if the ban lasted beyond September.

China also buys some US chicken wings and dark meat leg quarters. In total, China bought 754,000 tonnes of US chicken in 2008, or US$676mil worth, according to trade statistics.

Chinese importers last week told US chicken companies that Beijing was not issuing import permits for US chicken, effectively blocking the poultry for the rest of 2009.

It is believed that some US chicken could still enter China via Hong Kong, but industry sources said it was not known if the quantities would be comparable.

No reason was given for China’s action, but US poultry officials claim it is related to a Congressional measure that prevents imports of chicken from China.

"They want to get rid of the DeLauro Amendment. So this might be a shot over the bow," Paul Aho, an economist with consulting firm Poultry Perspective, said of the Chinese efforts.

The measure, championed by Representative Rosa DeLauro, prevents the US Agriculture Department from allowing imports of poultry from China.

Ms DeLauro is the Democratic head of an influential House of Representatives appropriations subcommittee that oversees the US Agriculture Department and Food and Drug Administration.

Her committee has effectively blocked imports of Chinese poultry products because of food safety concerns.

An annual spending bill, which the House of Representatives was expected to debate yesterday, could extend that ban through fiscal 2010, which starts on 1 October.

The Senate has not yet deliberated its version of the USDA appropriations bill.

In April, China launched a dispute with the World Trade Organisation against the United States over the Congressional measure.

The poultry issue is the latest of several trade skirmishes between the two countries covering a range of products.

China has banned US pork since the outbreak of a new strain of H1N1 flu virus, commonly called swine flu, even though the flu is not transmitted by hogs or pork.

Senior officials from the US Trade Representative’s office will travel to China next week to meet officials about bilateral trade issues.

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