Chicken seems to be a staple diet for most countries across the world and in fact poultry remains the most traded meat protein with a market share of approximately 41% of the global food market1. But since 2011, the growth in the industry has slowed down enormously and is now seen as quite a volatile market across the world. So, what has caused these sudden changes and is Asia keeping up with the competition?
Poor growth over the last 2 years
Over the last 2 years (since 2017), the growth in the global poultry market has only managed between 1% and 2%. As a product in itself (as opposed to other meat products) the market has fallen from 11.5% to 10.9%. This may not sound a great deal in the grand scheme of things, but it is quite clear that rather than experiencing continued growth, the industry has seen a fall in demand.
One of the major reasons for the changes in the market is the fact that one of the largest exporters –China – has been experiencing negative growth over the last few years. Disease issues such as Avian Influenza have led to increased import restrictions which in turn has led to an imbalance in trade. China has also come under the spotlight due to irregular use of antibiotics within the food chain.
Clearly Avian Influenza is not just restricted to China and many large trading countries such as Russia and the US have suffered increased security around imports and exports. Global streams overall have been greatly disrupted and, in most cases, returning to trade can only take place following a period of three months after the last outbreak.
Room for optimism as Asia fills the market gap
However, the news is not all bad. Whereas key exporters have been struggling, some countries such as Thailand are seeing much more favourable reports. Value-based figures show the country is up a massive 40% on the figures recorded in 2011; the EU is up 50%; and Turkey is up 20%. Thailand is now the leader in the processed chicken market which is traditionally dominated by China. Both Thailand and China benefit from low-cost highly skilled labour advantages. Thailand too has provided for the escalation in demand in Japan.
But there is more to the poultry industry than processed chicken. The global market can be split into four specific areas:
1. Whole chicken meat (Brazil, EU and Turkey)
2. White chicken meat (EU, US, Australia)
3. Processed chicken (Thailand, EU and the US)
4. Dark meat (Brazil, US, and EU)
New strategies needed to keep the poultry industry afloat
RaboResearch has become renowned within the food and agriculture industry across the world. As well as studying the current global poultry market they have looked into the strategies that would be needed to keep the industry in a healthy position. Their findings highlight 4 specific areas.
• Where there is growth in the industry, there is a tendency for it to be seen in emerging markets in Asia. 65% of the growth is reported to be in Asia with such countries as Thailand, Indonesia, Myanmar, and India. However, at the same time, RaboResearch have found, because of the reasons stated above, that exports alone will not enhance trade. It is suggested there is a need for greater focus on direct investment in the growing markets.
• Traders will always be wary of supply shocks (such as a return of Avian Influenza and resulting political tensions). It is felt that this negative effect can be lessened by spreading exports over a wider consumer base. In turn this will lead to a less concentrated and more international approach.
• There needs to be more attention paid to the specific markets within the industry which offer the greatest value. For instance, as outlined above, the processed chicken trade is a growing area and is likely to offer the greatest benefits as demand increases.
• Exporters and traders need to keep a close eye on changing production standards. For instance, there is a need for factors such as sustainability, food security and animal welfare to have a high importance in the supply chain.
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