China Broiler Industry Analysis & Forecast Report February 2016

By CnAgri 2016-05-26 14:51:29 Print Tel:861064402035 Email: [email protected]

Price: RMB12000(English Version) RMB7000(Chinese Version)

20160526025621923

Brief Introduction:

Basic Information:

Table of Contents:

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Content

1 Broiler Market Price and Prosperity Analysis. 4

2 Analysis of Broiler Industry Market 6

3 Broiler Industry Production Analysis and Forecast 9

4 Broiler and Chicken Import & Export Analysis and Forecast 11

5 Business Dynamics. 15

5.1 Sunner Development Technology Center passed the auditing and certification of CNAS.. 15
5.2 It’s estimated that Zhenzhou Shuanghui Group will produce 40,000 tons meat product and realize output value of 5 billion yuan. 15
5.3 PULIKE obtained production approval of poultry vaccine. 15
5.4 Yisheng Livestock &Poultry Breeding Co., Ltd: It’s estimated that the company suffered a loss of 390-410 million yuan in 2015. 16
5.5 It’s estimated that Minhe Animal Husbandry Co., Ltd. suffered a loss of 300-330 million yuan in 2015. 16
5.6 Sunner Development: the loss of the company increased to 395-415 million yuan in 2015. 16
Attached Tables. 17
Table1, Price of Broiler Chick in Major Provinces of China. 17
Table 2, Weekly Factory Price of Broiler With Feather in Major Provinces of China. 17
Table 3, Weekly Average Price of Chicken Products in China. 17
Attached Figures. 18
Figure 1, China Weekly Wholesale Prices of Chicken Meat in 36 Large Cities, 2013-2016. 18
Figure 2, Price of Broiler Chick With White Feather in China, 2012-2016. 18
Figure 3, The Price of Broiler With White Feather in China, 2012-2016. 19
Figure 4,The Price of Live Chicken With Yellow Feather in China, 2012-2016. 19
Figure 5, China’s Inventory of Progenitor Broiler Breeder With White Feather 20
Figure 6, China’s Inventory of Parental Broiler Breeder With White Feather 20
 

BOABC Viewpoint: Inventory of reproductive GP white feather broiler in our country will drop to the lowest point in recent years
 
Avian influenza happened in France and the US successively, no imported breeding bird arrived at port of China in January, 2016, and less than 20,000 sets breeding birds arrived at port in February, it’s estimated that China’s introduction quantity of GP stock or will drop to 400,000-500,000 sets and the industry will decrease capacity continuously in 2016.
 
After the introduction quantity of GP stock increased to 1.54 million sets in 2013, China Animal Agricultural Association set up broiler association to control the introduction quota of GP stock and successfully made the introduction quantity dropped to 1.17 million sets in 2014. As China prohibited importing American poultry in 2015, the introduction quantity of GP stock declined further and only was 700,000 sets all year round.
 
Sharp decrease of introduction quantity of GP stock laid the foundation of de-capacity trend of white feather broiler industry. In February 2016, the inventory of reproductive GP stock only is 700,000 sets, the lowest point since 2009. It’s estimated that the effect of de-capacity of GP stock and parental stock will be transmitted to commercial chicken, de-capacity effect of white feather broiler industry will be reflected in supply in the second half of 2016.
 

1 Broiler Market Price and Prosperity Analysis

1.1 In February, the price of broiler and broiler chick respectively increased by 6.74% and 52.77% month on month

(1) Broiler price change
Fresh chicken meat: the average wholesale price of fresh chicken killed or stripped feather off in China’s 36 large and medium-sized cities was RMB15.71/Kg, up by 6.74% month on month, decreasing2.67% year on year.
Broiler with feather: the purchasing price of broiler with feather in various producing areas was RMB7.56/Kg, up by 4.71% month on month, decreasing3.19% year on year.
Broiler chick: the factory price of broiler chick in main producing areas was RMB3.61/bird, increasing 52.77% month on month and 98.77% year on year.
(2)Broiler feed price change
According to MOA’s data of feed prices of fair trade market, the price of compound feed for broiler was RMB3.14/Kg, decreasing by 0.48% month on month and 7.52% year on year.
Table 1.1 Price Trend of Chicken Meat, Broiler With Feather, Broiler Chick and
Unit:RMB/KG, RMB/Head
  Chicken Meat Broiler With Feather Broiler Chick Compound Feed Price
Feb-2016 15.71 7.56 3.61 3.14
MoM 6.74% 4.71% 52.77% -0.48%
YoY 2.67% -3.19% 98.77% -7.52%
Data source: MOA, BOABC

1.2 Broiler breeding kept losing in February

This month the ratio between broiler price and grain price was 3.39, the ratio between broiler price and feed price was 2.26. The profit of each link of China’s broiler breeding industry in this month is as follows:
Breeding link: the gross profit of broiler breeding was about RMB-0.34/bird, increasing RMB0.58/bird month on month, down by RMB0.64/bird year on year;
Slaughtering link: the gross profit of slaughtering link was about RMB0.79/Kg, increasing RMB0.04/Kg month on month, increasing RMB1.15/Kg year on year.
Wholesale link of broiler: the gross profit of chicken killed or stripped feather off in wholesale link was about RMB3.87/Kg, increasing RMB 0.19/Kg month on month, decreasing RMB0.31/Kg year on year.
Retail link of broiler: the gross profit of chicken killed or stripped feather off in retail link was about RMB3.93/Kg, decreasing RMB0.06/Kg from last month and same as last year.
Table 1.2, Benefit on the Value Chain of Broiler in China
Unit:RMB/Head, RMB/KG
  Broiler/Corn Broiler/Feed Breeding Slaughter Wholesale Retail
Feb-2016 3.39 2.26 -0.34 0.79 3.87 3.93
MoM 0.04 0.02 0.58 0.04 0.19 -0.34
YoY 0.06 -0.06 -0.64 1.15 -0.31 -
Source of data: BOABC data
Figure 1.1: Profit on Broiler Breeding Industry Chain
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Source of data: BOABC data

1.3 The profit of breeding Sanhuang chicken in February decreases by 48.33% year on year

Purchasing price: the purchasing price of Sanhuang chicken is 10.11yuan/kg, decreasing by 4.65% month on month and increasing by 16.05% year on year.
Chick price: the price of chick is 1.5yuan/bird, increasing by 6.99% month on month and same as last year.
Breeding profit: the profit of breeding Sanhuang chicken is 1.07yuan/bird, respectively decreasing by 50.42% month on month and 48.33% year on year.
Figure 1.2: Profit on Sanhuang Chicken Breeding
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Source of data: BOABC data
 
2 Analysis of Broiler Industry Market

2.1 It’s predicted that broiler industry will keep depressed at the first half of 2016

China’s breeding profit of broiler declined sharply, the gross profit of breeding white feather broiler turned gains to losses with a loss of 0.79yuan/bird in 2015. Though breeding benefit declined, broiler industry showed growth against the trend for overcapacity of broiler industry in China, the slaughter of professional broiler was 9.174 billion birds, increasing by 0.76% from 2014. Of that, the slaughter of white feather broiler, yellow feather broiler and crossbred broiler respectively was 4.579 billion birds, 3.678 billion birds and 917 million birds.
 
China’s output of professional broiler was 12.68 million tons in 2015, increasing by 1.19% from 2014. Chicken output of top ten provinces including Guangdong, Shandong, Liaoning, Jiangsu, Jilin, Henan, etc. accounted for about 76% of national chicken output.
 
If no epidemic disease breaks out in 2016, with gradual recovery of domestic meat poultry market, meat poultry slaughter will increase continuously, the growth rate of yellow feather broiler slaughter will be greater than that of white feather broiler.
 

2.2 Inventory of reproductive GP white feather broiler in our country will drop to the lowest point in recent years.

Avian influenza happened in France and the US successively, no imported breeding bird arrived at port of China in January, 2016, and less than 20,000 sets breeding birds arrived at port in February, it’s estimated that China’s introduction quantity of GP stock or will drop to 400,000-500,000 sets and the industry will decrease capacity continuously in 2016.
 
After the introduction quantity of GP stock increased to 1.54 million sets in 2013, China Animal Agricultural Association set up broiler association to control the introduction quota of GP stock and successfully made the introduction quantity dropped to 1.17 million sets in 2014. As China prohibited importing American poultry in 2015, the introduction quantity of GP stock declined further and only was 700,000 sets all year round. 
 
Sharp decrease of introduction quantity of GP stock laid the foundation of de-capacity trend of white feather broiler industry. In February 2016, the inventory of reproductive GP stock only is 700,000 sets, the lowest point since 2009. It’s estimated that the effect of de-capacity of GP stock and parental stock will be transmitted to commercial chicken, de-capacity effect of white feather broiler industry will be reflected in supply in the second half of 2016.
 

2.3 China chicken consumption still has greater growth space.

Compared with developed countries and regions such as the US, EU, Japan, etc., China’s per capita consumption of chicken still is in lower level.
 
China’s per capita consumption of chicken showed slow growth trend from 2000 to 2012, and it only was 7.42 kg/person in 2000 and then peaked in 2012 with a consumption of 10.00 kg/person, reaching a compound annual growth rate of 2.25%. China’s per capita consumption of chicken decreased slightly in 2013, and respectively dropped to 9.68 kg/person and 9.38 kg/person under the influence of avian influenza and fast-grown chicken incident.
China’s per capita consumption of chicken was 9.38 kg/person in 2014, while it respectively was 45.68 kg/person, 19.52 kg/person and 17.52 kg/person in the US, EU and Japan, which respectively is 4.9 times, 2.1 times and 1.9 times of China’s per capita chicken consumption.
In 2015 per capita chicken consumption rose to 9.88 kg/person again in China, but it still was lower than world average level, 12.7 kg/person. China’s chicken consumption still has greater growth space.
 

2.4 Sunner Development Co., Ltd. innovated new industry model and realized a total output value of 20.2 billion yuan in 2015.

With total assets of 13.5 billion yuan Sunner Development Co., Ltd. had near 400 production bases and more than 25,000 employees in 2015. The company produced 351 million broilers, sold 60,700 tons cooked chicken products, and realized gross output value of industry and agriculture of 20.2 billion yuan and export value of 53.356 million US dollars all year round. Sunner Development Co., Ltd. jumped to the eighth in global white feather broiler enterprises ranking, the second in Asia, and the first in China.
 
(1)Building ecological model of “propagating, feeding and slaughtering” bird by itself
In the construction of industrial cluster, Sunner Development Co., Ltd. persists in all in all out whole industrial production model of “propagating, feeding and slaughtering” bird by itself. Feed factories, GP stock and parental stock farms, hatcheries, commercial broiler farms and slaughterhouses all are owned by the company. In addition, the company has built perfect food safety traceability system, whole productive process from hatching egg to hatching, from feed to breeding, from slaughtering to processing of very batch of birds even every bird can be traced back, which ensures chicken safety.
 
(2) Extension of industry chain is realized by franchising model
Sunner Development Co., Ltd. will transform and upgrade its sales model, plan to directly sell chilled and fresh chicken products to terminal consumers by means of asset-light that is franchising model and open 20,000 stores in next five years.
 
(3) KKR jointed Sunner Development which arranges global chicken resource
The company’s private placement plan was approved by China Securities Regulatory Commission in March, 2014, and KKR officially became the second largest shareholder of Sunner Development. With globalization sight and thinking Sunner Development integrates, allocates and arranges global chicken resource and speeds up promoting internationalization of capital, market, brand and management. Its products were exported to the US, Japan, Korea, South Africa, etc. successfully, and its export value reached 53.356 million US dollars in 2015.
 
With above mentioned superiorities, Sunner Development will realize global allocation of chicken resource and become China’s even world’s top-ranking chicken production and food processing enterprise three to five years later. 
 
3 Broiler Industry Production Analysis and Forecast

3.1 In February, monthly inventory of broiler decreased 12.25% year on year

According to BOABC’s monitoring data, China’s inventory of broiler in February 2016 was 1.363 billion birds, decreasing 4.50% month on month and 12.25% year on year. Farmers’ enthusiasm about restocking increased in late February, it’s estimated that broiler inventory will increase slightly in March.
 
Broiler breeder with white feather: according to BOABC’s monitoring data, China’s inventory of progenitor broiler breeder with white feather in the laying period was 700,000 suits in February 2016, down by 10.26% month on month and 30.86% year on year.
Parental broiler breeder with white feather: according to BOABC’s monitoring data, China’s inventory of parental broiler breeder with white feather in the laying period was 25.00 million suits in February 2016, down by 18.35% month on month, up by 8.20% year on year.
Figure 3.1,China’s Broiler Inventory
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Source of data: BOABC data

3.2 In February, monthly slaughter of broiler decreased 22.06% year on year.

According to BOABC’s monitoring data, China’s production of broiler was 597 million birds in February 2016, decreasing 9.80% from last month and 22.06% from last year. The restocking volume of farmers increased slightly in late February, it’s estimated that broiler slaughter will go up in March.
Figure 3.2, China’s Broiler Slaughter
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Source of data: BOABC data
 
 
 
4 Broiler and Chicken Import & Export Analysis and Forecast

4.1 No imported breeding bird arrived at port in China in January 2016

No imported breeding bird arrived at port in China in January 2016, it’s estimated that the import volume of breeding bird will be lower than 20,000 sets in February.

4.2 Chicken and chopped entrails import in January

In January 2016, China imported 36,419 tons chicken and chopped entrails, down by 12.50% month on month and 13.46% year on year. Under the influence of the Spring Festival vacation, China import volume of chicken will decrease in February.
Table 4.1, China’s Monthly Imports of Chicken
Unit:MT
Product Name January
Quantity YoY(%)
Total 36,419 -13.46%
Entire Chicken (Fresh And Chilled) 0 0.00%
Frozen Chicken Piece With Bone 5,709 39.71%
Other Frozen Chicken Piece 77 7507.14%
Frozen Chicken Wings 17,432 27.37%
Frozen Chicken Feet 10,996 -42.57%
Other Frozen Chopped Chicken Entrails 2,205 -57.30%
Source of data: China Customs, BOABC
Figure 4.1, China’s Monthly Import Changes of Chicken in 2014-2016 
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Source of data: China Customs, BOABC
In January, the average CIF price of imported chicken was 2,347 USD/T, down by 0.85% month on month, up by 26.33% year on year.
 
(1) Brazil is China’s largest source country of imported chicken and chopped entrails
The imported chicken and chopped entrails mainly came from Brazil, the US, Argentina, Chile, etc., and Brazil is China’s largest source country of imported chicken and chopped entrails.
In January, China imported 29,622 tons chicken and chopped entrails from Brazil, accounting for 81.34% of total.
 
(2) The list of top 10 enterprises and the volume of imports
Table 4.2, Top 10 China Broiler and Giblet Importers in January 2016
Unit:MT
Importers Total Frozen Chicken Piece With Bone Other Frozen Chicken Piece Frozen Chicken Wings Frozen Chicken Feet Other Frozen Chopped Chicken Entrails
Shenzhen Haijixing Cold Chain Co. Ltd. 3,290 699 0 1,745 740 106
COFCO Meat (Beijing) 2,333 26 0 2,137 122 48
Guangzhou Zhehui Trading Co. Ltd. 1,780 0 0 1,643 127 10
Shanghai Fuzheng Trading Co. Ltd. 1,604 182 0 104 1,229 90
Shenzhen Yuanxiang Investment Development Co. Ltd. 1,576 108 0 755 564 149
Suzhou Xiangwei Food Co. Ltd. 1,328 293 50 81 842 63
Shenzhen Lijun Import & Export Trade Co. Ltd. 1,281 66 0 1,145 50 20
Nanjing Yuanheng Food Co. Ltd. 1,245 312 0 193 606 133
Suzhou Huadong Food Co. Ltd. 1,124 782 0 0 265 78
Shanghai Tiancuiting Health Food Co. Ltd. 1,069 0 0 0 1,042 27
Source of data: China Customs, BOABC

4.3 Chicken and chopped entrails export

China exported 12,097 tons chicken and chopped entrails in January, down by 40.93% month on month and 4.42% year on year. Under the influence of the Spring Festival vacation, China export volume of chicken will decrease in February.
Table 4.3, China’s Monthly Exports of Chicken
Unit:MT
Product Name January
Quantity YoY(%)
Total 12,097 -4.42%
Entire Chicken (Fresh And Chilled) 1,748 69.50%
Entire Chicken (Frozen) 101 -6.28%
Frozen Chicken Piece With Bone 1,670 68.77%
Other Frozen Chicken Piece 8,219 -20.15%
Frozen Chicken Wings 108 -
Frozen Chicken Feet 0 0.00%
Other Frozen Chopped Chicken Entrails 250 6.69%
Source of data: China Customs, BOABC
 
In January, the average FOB price of exported chicken was 2,060 USD/T, down by 16.67% month on month and 13.02% year on year.
Figure 4.2, China’s Monthly Export Changes of Chicken in 2014-2015 
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Source of data: China Customs, BOABC
(1) Exports by Countries
Hong Kong is Chinese mainland’s largest export destination of chicken and chopped entrails.
In January, 7,039 tons chicken was exported to Hong Kong, occupying 58.19% of total chicken exports; while as the second destination, Malaysia covered 16.22%.
 
(2) The list of top 10 enterprises and the volume of exports
Table 4.4, Top 10 China Broiler and Giblet Exporters in Jan 2016
Unit:MT
  Total Entire Chicken (Fresh and Chilled) Entire Chicken (Frozen) Frozen Chicken Piece With Bone Other Frozen Chicken Piece Frozen Chicken Wings Other Frozen Chopped Chicken Entrails
Wafangdian Longcheng Food Processing Co., Ltd 2,283 0 0 620 1,604 31 28
Shandong Fengxiang Industrial Co., Ltd 1,380 0 0 50 1,330 0 0
Wafangdian Zhongda Food Co., Ltd 774 0 0 117 655 2 0
Shandong Minhe Import & Export Co. Ltd. 739 0 0 325 369 0 45
Qingdao Nine-Alliance Group 678 0 0 102 562 0 14
Guangdong Wens Jiarun Food Co., Ltd 589 534 55 0 0 0 0
Botou xinfengyuan Food Trade Co. Ltd. 555 0 0 54 501 0 0
Dalian MIngchuan Foods Co., Ltd 505 0 0 87 337 33 49
Shandong Ronghua Foodstuff Group Co., Ltd 503 0 0 0 411 0 92
Dalian Zhongjia Foods Co., Ltd 456 0 0 53 376 27 0
Source of data: China Customs, BOABC
5 Business Dynamics

5.1 Sunner Development Technology Center passed the auditing and certification of CNAS

Twenty-four projects of animal testing field, microorganism field and chemical field, which were applied by Sunner Development Technology Center, all passed national certification and obtained the recognized certificate issued by CNAS on February 19. It indicates that the company’s Technology Center has the ability of carrying out testing and calibration services according to responding accreditation criteria, meets the requirements of state-level laboratory, and the testing results obtain the recognition of accreditation bodies in countries and regions which have signed mutual recognition agreement with CNAS.
 

5.2 It’s estimated that Zhenzhou Shuanghui Group will produce 40,000 tons meat product and realize output value of 5 billion yuan.

On February 17, Zhenzhou Shuanghui Group published a message that it will produce 40,000 tons American low temperature high grade meat products to supply upscale market in China and the US.
 

5.3 PULIKE obtained production approval of poultry vaccine.  

According to PULIKE’s evening announcement on February 21, the company obtained the veterinary drug approval number issued and approved by the MOA of one poultry vaccine on February 19. The new developed vaccine is a recombinant avian influenza (H9 subtype) virus - Re-9 strain constructed and acquired by means of genetic recombination by PULIKE and its partner, the strain features high titers of proliferation, wide antigen protection spectrum, high post-immunization HI antibody, good biosafety (less virulent) and other advantages, this vaccine filled in gaps in domestic avian influenza (H9 subtype, genetic recombination) triple inactivated vaccine.

5.4 Yisheng Livestock &Poultry Breeding Co., Ltd: It’s estimated that the company suffered a loss of 390-410 million yuan in 2015

On January 30, Yisheng Livestock &Poultry Breeding Co., Ltd. announced performance amendment notice that the net profit attributable to the shareholders of listed companies suffered a loss of 390-410 million yuan in 2015, decreasing by 1758.87% to 1843.94% year on year.
 

5.5 It’s estimated that Minhe Animal Husbandry Co., Ltd. suffered a loss of 300-330 million yuan in 2015.

Minhe Animal Husbandry Co., Ltd. published performance forecast on January 30, it’s estimated that the net profit attributable to shareholders of listed companies suffered a loss of 300-330 million yuan from January to December, 2015, decreasing by 578.55% to 626.40% year on year.
 

5.6 Sunner Development: the loss of the company increased to 395-415 million yuan in 2015.

The company’s announcement on January 29, 2016, according to preliminary estimation of finance department, it’s estimated that the net profit attributable to shareholders of listed companies suffered a loss of 395-415 million yuan from January 1 to December 31, 2015, while in the same period last year the profit was 76.1784 million yuan.
 
 
 
 
 
 
 
Attached Tables

Table1, Price of Broiler Chick in Major Provinces of China

Unit:RMB/Head
  Liaoning Henan Hebei Jiangsu Shandong Average
Feb-2016 3.69 3.55 3.60 3.64 3.57 3.61
MoM 63.01% 52.96% 50.50% 51.08% 46.98% 52.77%
YoY 102.07% 103.12% 93.31% 87.53% 109.53% 98.77%
Source of data: BOABC data
 

Table 2, Weekly Factory Price of Broiler With Feather in Major Provinces of China

Unit:RMB/KG
  Liaoning Henan Hebei Jiangsu Shandong Average
Feb-2016 7.61 7.53 7.45 7.53 7.65 7.56
MoM 10.33% 0.68% 5.62% 6.76% 0.82% 4.71%
YoY 0.98% -9.02% -1.76% -0.85% -4.67% -3.19%
Source of data: BOABC data
 

Table 3, Weekly Average Price of Chicken Products in China

Unit:RMB/KG
  Drumstick Boneless leg Chicken breast Chicken wing
Feb-2016 14.28 20.13 10.74 22.67
MoM 8.09% 8.09% 8.09% 8.09%
YoY 11.33% 12.08% -31.60% 11.41%
Source of data: BOABC data

 
Attached Figures

Figure 1, China Weekly Wholesale Prices of Chicken Meat in 36 Large Cities, 2013-2016


Data source: Ministry of Agriculture
 
 

Figure 2, Price of Broiler Chick With White Feather in China, 2012-2016


Source of data: BOABC data
 
 
 
 
 
 

Figure 3, The Price of Broiler With White Feather in China, 2012-2016


Source of data: BOABC data
 
 

Figure 4,The Price of Live Chicken With Yellow Feather in China, 2012-2016


Source of data: BOABC data
 
 
 
 
 
 
 

Figure 5, China’s Inventory of Progenitor Broiler Breeder With White Feather


Source of data: BOABC data
 
 

Figure 6, China’s Inventory of Parental Broiler Breeder With White Feather


Source of data: BOABC data





 

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