Saudi Arabia's Broiler Production Expands

US - Broiler meat production in Saudi Arabia is expected to reach 700,000 MT in 2015, about 8 per cent higher than production in 2014, according to a report from the US Department of Agriculture's Foreign Agricultural Service.
calendar icon 10 September 2015
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Production is projected to further rise to 780,000 MT in 2016.

The large increase in Saudi broiler production is attributed mostly to ongoing expansion projects by the three largest poultry producers, Al-Watania, Fakieh and Almarai poultry farms.

Several years ago, Saudi Arabia’s government has stated a strategic goal of achieving full self-sufficiency in poultry meat consumption, a goal that most analysts believe is not practically feasible.

Some poultry analysts believe that a more realistic goal of 60 per cent self-sufficiency of poultry consumption would possibly be achievable. Reaching this target, however, would require a huge expansion in Saudi Arabia’s poultry production capacity, high costs of subsidised poultry feed products, and the implementation of a unified biosecurity system to help reduce chicken broiler mortality rates.

Production challenges

Broiler meat production costs in Saudi Arabia are relatively high because of the heavy reliance on imports of poultry feed products, poultry vaccines and equipment as well as the high costs of controlling temperature in the chicken houses under extremely hot weather conditions year-around.

In order to help local poultry producers cope with the high production costs, the Saudi government (SAG) has been providing various types of production support that include subsidies for animal feed, interest-free loans and rebates on the purchase of certain poultry equipment. Feed costs account for about 70 per cent, on average, of broiler production costs in Saudi Arabia.

Controlling poultry disease outbreaks has continued to be among the major challenges facing the Saudi poultry industry in recent years. According to some industry contacts, chicken mortality rates remain as high as 50 per cent in some farms.

The high mortality rates in the Saudi chicken farms were attributed mostly to outbreaks of viral diseases such as Newcastle Disease (ND), Gumboro (IBD), Infectious Bronchitis (IB) and Avian Influenza (H9N2 subtype). According to poultry experts, the average mortality rate in the Saudi poultry farms in the last few years has been around 25 per cent.

Pilgrims benefit consumption

Poultry meat remains the most competitive source of animal protein in Saudi Arabia, where total consumption is projected to reach about 1.54 million MT in 2015, which represents an increase of about 11 per cent over the estimated consumption level in 2014.

Overall, Saudi poultry consumption has been increasing by about five per cent annually in the last few years.

This year, the increase in consumption is expected to be higher due to the continued expansion in the food service sector, the annual population growth, and higher demand anticipated by the food catering companies in the holy cities of Makkah and Madina, as a result of a significant increase in the number of Umrah and Hajj pilgrims.

Imports and exports

Total Saudi broiler meat imports in 2015 are expected to reach a record high of 900,000 MT, an increase of 13 per cent compared to 793,000 MT imported the year before.

As local broiler production continues to increase, total broiler meat import in 2016 is projected to drop slightly to 850,000 MT.

In 2014, Brazil supplied 81 per cent of Saudi Arabia’s broiler meat imports, followed by France with a 15 per cent market share, then the US with two per cent.

Saudi Arabia has imposed temporary import bans on imported poultry and eggs products from several states in the US that have confirmed the presence of highly pathogenic avian influenza (HPAI) in their poultry farms.

Saudi Arabia’s total broiler meat exports, mainly to the Gulf Cooperation Council (GCC), are estimated at 50,000 MT in 2014. The Saudi poultry exports are projected to increase about 20 per cent to 60,000 MT in 2015, mainly due to the increase expected in local broiler production.

The Saudi government levies $266.67 export tax per MT on local broiler meat exported abroad, in order to reimburse for various subsidies it offers to domestic broiler meat producers.

Further Reading

You can view the full report by clicking here.

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