China faces chicken shortage as ban on U.S. breeder bird imports bites
By Dominique Patton
BEIJING, Sept 5 (Reuters) - China's near two-year ban on U.S. imports of chickens used for breeding is threatening supplies of chicken meat in the world's second-largest poultry market, leading to the first shortfall in at least a decade and potentially pushing up prices.
China relies on imported breeding stock for production of white-feathered broiler chickens, the type used by fast-food chains, which account for more than half the country's chicken supply.
But Beijing banned poultry imports from the United States last year in response to a December 2014 bird flu outbreak. That, followed by a similar ban on imports from France late last year, has seen a sharp drop in the supply of white-feather "grandparent" stock.
Grandparent birds are the progeny of pedigree stock bred largely by three global companies, Aviagen, Cobb-Vantress and Groupe Grimaud. China has so far been unsuccessful in developing its own white-feather pedigree lines.
Imports of breeding chicks - shipped in lots of 168 - fell to 720,000 units last year, around half the levels of 2013, said Fujian Sunner Development Co, a chicken supplier to Yum Brands' KFC.
Only 110,000 units have entered the market so far this year, it added in its first half-report, well below what is needed to produce enough broiler chickens for next year's demand.
The U.S. supplies about half of the world's breeding chicks, followed by the United Kingdom. Only Spain and New Zealand, much smaller producers, can currently ship chicks to China.
"Even if the government lifts its bans by the end of the year, next year's supply [of meat] wouldn't recover," said Pan Chenjun, senior analyst at Rabobank. Continuación...