Prices for Thai live broilers and broiler meat are forecast to rise as a result of a slowdown in production growth and continued strong exports.
The rising price trend is expected to limit growth in chicken meat consumption to about 2% in 2019.
Exports are forecast to increase by 6% to 870,000 MT in 2019 due to anticipated continued growth in exports to Japan and other non-EU markets. Chick production capacity is estimated at 36-38 million birds/week vs 35-36 million in 2018.
According to trade sources, Thailand’s domestic corn prices are 20-30% higher than global corn prices. On average, feed cost increased by 10% in the first half of 2018 to 22 baht/kg of live broiler from 20 baht/kg in 2017.
The current average production cost of 35 baht/kg can be broken down into day-old chick cost (six baht), feed (22 baht), vaccination and drugs (two baht), and labor and other costs (five baht).
Live broiler prices dropped from 36-37 baht/kg in September to 28-32 baht/kg in the first seven months of 2018 due to a broiler supply surplus and a sharp reduction in hog and pork prices (about 10-20% from late 2017 to early 2018).
Thai broiler meat production is forecast to grow 4% in 2019 to three million metric tons (MMT) from 2.88 MMT in 2018 due to growth in exports and domestic demand. Domestic consumption of chicken meat surged by 3-4% in 2018 due to lower retail prices for broiler meat.
In the first seven months of 2018 (Jan-Jul), chicken meat exports (both cooked and uncooked) increased by 12% to 470,812 MT from 420,124 MT year-on-year. Uncooked products grew by 30% and cooked products 4%. Exports to Japan increased by 9%, mainly because Japan continues to place strong orders for Thai products at the expense of Brazilian uncooked chicken meat and Chinese cooked chicken meat.
Growth in the EU is mainly in the cooked segment because the EU’s strict salmonella rules discourage Thai exporters from exporting uncooked products there.
Thai exporters are tapping into new markets other than Japan and the EU. Exports to these markets grew by 27% in the first seven months of 2018 (Jan-Jul), mostly in uncooked products.