Approximately one-third of global meat exports, or 6 million metric tonnes, are presently being affected by animal disease outbreaks, the United Nations Food and Agriculture Organization (FAO) said. With the value of global meat and live animal trade estimated at $33 billion (excluding European Union intra-trade), this could amount to world trade losses of up to $10 billion, if import bans extend throughout 2004.
Trade losses will likely accrue to the 12 nations facing export bans or market constraints as a result of animal disease concerns related to avian influenza and bovine spongiform encephalopathy (BSE, or mad cow disease).
The impact on small poultry producers in Asia may be considerable, with more than 100 million birds estimated to have died or have been culled over the past two months. The impact of import bans on export-dependent countries such as Thailand, which has culled around 36 million birds or 25% of its domestic flocks, will increase income vulnerability of small producers as local prices drop sharply.
In the case of BSE, countries around the world have banned beef imports from the United States and Canada. The United States and Canada account for more than one-quarter of global beef exports (around 1.6 million tonnes, valued at about $4 billion). US beef exports, after reaching 1.2 million tonnes in 2003, are expected to drop to 100,000 tonnes in 2004 if bans remain in place for the entire year, the US Department of Agriculture estimated.
Both Canada and the United States, in addition to 10 Asian countries, have reported outbreaks of bird flu. These nations account for 4 million tonnes or 50% of world exports of poultry meat (with the United States accounting for nearly 35%).
While avian flu outbreaks in North America are not reported in commercial flocks, any prolonged ban on US exports, which constitute 15% of domestic production, will put downward pressure on all US meat prices.
As a result of poultry and beef import bans, FAO expects the demand for substitutes such as pork to increase significantly. This is already visible in Japan, where shortages of beef and chicken have led to pork prices surging 40% in February after import bans on US beef and Asian poultry.
Japan, heavily dependent on meat imports, is planning to resume imports of heat-treated poultry from Thailand. Out of the $450 million of Thai poultry exported to Japan in 2003, approximately one quarter is reported to be in processed form. The EU is already taking processed product from Thailand.
Meanwhile, non-traditional exporters are moving to supply Japanese import poultry demand. Both Malaysia and the Philippines will export poultry to Japan. Malaysia will export 200 to 240 tonnes of boneless chicken, while the Philippines is expecting to ship 30 000 tonnes.
Brazilian exporters indicate that stronger demand for Brazilian poultry products in the wake of bird flu outbreaks would increase 2004 output by 5% to 6% while pushing poultry exports up by 15%.
Chinese exports are forecast to decline by 20% in 2004 in response to bird flu outbreaks. Meanwhile imports are expected to decline even more, down 25% due to a slowdown in consumption and poultry product import bans on bird flu-affected suppliers including the United States.
