Chinese imports of Thai chicken by-products may boost prices in second half: Bualuang
Prices of day-old chicks, domestic live chickens and chicken by-products have remained at low levels due to lingering excess supply and weaker meat demand, according to Bualuang Research.
“We hope that Chinese imports of Thai chicken by-products will boost domestic by-product prices in the second half of the year, but the risk factor is the price uptrend for raw materials, which will squeeze livestock margins in 2018. Our Hold rating stands, pending visible recoveries in by-product prices and earnings,” the research house said in a release on Friday.
“We believe that the approval by Chinese authorities of imports of Thai edible chicken – including frozen poultry meat and chicken by-products – from seven Thai chicken processing plants (including GFPT) starting March 7 is likely to boost domestic live chicken and by-product prices in the second half of this year,” it stated.
“Although the product category includes both raw chicken meat and by-products … we expect Chinese demand to focus mainly on chicken by-products (especially chicken claws/feet) rather than raw chicken meat,” the statement added.
In such a scenario, by-product prices would be likely to improve but live-chicken prices may not necessarily rise, as by-products are the leftovers after slaughtering the live chicken for its meat, Bualuang explained.
“It therefore remains to be seen whether domestic chicken prices will rise in the second half, and we have yet to quantify by-product export volumes to China,” the company said.
