Chinese animal feed sales on road to recovery?

Demand for poultry feed begins to recover as consumer fears diminish over avian influenza

Sales of poultry products in China may be showing some signs of recovery as fears over avian influenza H5N9 are calmed, and this is feeding through to improved sales of poultry feed.

The change in consumer behavior could represent the beginning of the end of a difficult period for China’s feed producers. Feed sales have been slowing in the country since mid-2012, due to a high combination of high input costs and low animal protein prices. Over the first three months of this year, for example, China’s imports of soybean meal, at 11.49 million metric tons, was 13.4 percent lower. 

The avian influenza outbreak has exacerbated problems. Since the crisis, demand for soybean meal has dropped by 8-10 percent. Many companies have been forced to offer discounts or special promotions, as demand from poultry producers declined and inventories ran down.

For 2012, the China Feed Industry Association notes that country produced 171.7 million metric tons of compound feed. Despite the recent glimmer of an upturn, total feed production is expected to be 20 percent lower in 2013.