A lower TRQ in Russia reduces broiler trade in the short run, but trade recovers and grows at a rate of 1.3% annually. Total broiler production increases by 0.97 mmt, reaching 8.29 mmt in 2019.
The U.S. maintains its market share. The EU remains a net importer. Brazil loses 5.1 points of market share. After losing 59.4% of its exports because of AI, Thailand regains 2.6 points of market share in the next decade. Productivity improvements, product innovation, and a shift to higher-valued products enable Thailand to overcome SPS concerns and its higher cost of production. Australia gains 1.2 points of market share.
Over the rest of the decade, Brazil’s net exports stay at around 3.6 mmt. Fiscal incentives and subsidies from local government continue to encourage large new investments in broiler production.
In 2009, Thailand’s broiler sector began to recover from the AI crisis that caused a major export drop beginning in 2004. Recovery is helped by a new TRQ from the EU, expansion of integrated producers, productivity improvements (low feed conversion ratios), reduced processing costs, investment in production innovation, and a shift to higher-valued cooked products. Thailand’s net exports increase by 6.5% annually, reaching 635 tmt in 2019.
The EU changed from a net exporter to a net importer in 2007 and it continues in this position. Its net poultry imports reach 29 tmt in 2019.
Under NAFTA, Mexico removed the global TRQ and its prohibitive out-quota rates. A safeguard agreement was reached with the U.S., whereby a TRQ for chicken leg quarters is imposed. The product is duty free, but out-quota is charged a 98.8% duty. The TRQ was removed in 2008. Strong domestic demand drives net imports to grow 2.0% annually and reach 577 tmt in 2019.
With its WTO accession, Taiwan removed its quota and replaced it with a “tariff-only regime” in 2005. As a result, imports are projected to increase 7.3% annually. They reach 116 tmt in 2019. A shift to differentiated local breeds sustains domestic production at a growth rate of 1.5% per year.
Russia imposes a lower TRQ of 0.78 mmt over the next decade. Over the outlook period, quota for imports is binding, as domestic production is encouraged and grows by 3.0%, exceeding the 1.7% growth in consumption. In the next decade, China’s net imports grow rapidly, reaching 418 tmt in 2019.
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Source: FAPRI
