The outbreak of swine fever in China benefits chicken farmers

BEIJING (Reuters) – An outbreak of African swine fever in China is proving to be a boon for chicken farmers, pushing prices for the country's second most popular meat to a two-and-a-half year high.

As pork is rare, authorities trying to contain the highly contagious disease, consumers are turning to chicken as a substitute, some consumers are also concerned about safety.

The turnaround is a boon for farmers of the world's largest poultry producer after warm demand growth in recent years, following a series of food crises and bird flu.

Broiler chicken prices in the most productive region of Shandong reached 9.7 yuan (US $ 1.41) per kilogram earlier this month, their highest level since March 2016.

"Recent outbreaks of African swine fever have pushed chicken purchases into cafeterias and restaurants to some extent. More people could choose the chicken now, especially in areas infected with African swine fever cases, "said Li Jinghui, general manager of the China Poultry Association.

Swine flu can not be cured and is often deadly for pigs. After more than a dozen outbreaks since the first case reported in early August, Beijing has slaughtered around 40,000 pigs and banned the transport of live pigs to and from infected areas.

Movements have tightened supply in the south of the country, causing prices to surge while demand grows in anticipation of a week-long holiday in October.

Chicken is a cheaper substitute for pork, and prices generally increase when pork prices rise.

According to Pan Chenjun, an analyst at Rabobank, some cuts, such as chicken bones, used in school and professional canteens, are already at record levels.

Anecdotal reports suggest that some consumers are also worried about swine fever due to infected swine, even though the disease can not be passed on to humans.

"Although there is no official notification on the [swine flu] epidemic, I think that the pig is dangerous, "said a student from the city of Guangzhou, in the south of the country, nicknamed Zhuang. "Now I choose chicken dishes when I'm out for a meal."

Stock prices jumped in August in companies, including poultry producers Fujian Sunner Development Co. Ltd. and Shandong Xiantan.

Alice Xuan, an analyst at Shanghai JC Intelligence Co. Ltd., said stock prices and broiler prices fell slightly this month, with other chickens sent to slaughterhouses before the holidays.

This comes despite a shortage of breeders, which has already helped support chicken prices this year, say industry analysts and participants.

Beijing's anti-dumping duties on imports of chicken meat from Brazil, introduced in June, also supported chicken prices in China.

Average prices for chicken meat products reached 11.15 yuan per kg in early September, up 13.2 percent year-on-year, according to Boyar, an agri-food consultancy firm.