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Tue, Feb 03, 2004 - Page 12 News List

Poultry inventory expected to fall

BLOOMBERG AND REUTERS , BEIJING AND SHANGHAI

A Chinese shopper walks past a row of shutdown poultry stalls at a market in Shanghai yesterday. China's densely populated financial hub of Shanghai has halted trade of live poultry in a bid to stop the spread of deadly bird flu that has triggered health scares across the country, the government said yesterday.

PHOTO: REUTERS

China's inventory of chickens, ducks and other live fowl may fall 10 percent over the next three months as the bird flu epidemic cuts demand, dragging down prices for livestock grain feed, the government said.

China's farm fowl inventory may fall to 7.9 billion by the end of the first quarter, said Wang Jun, a livestock analyst with Beijing Orient Agribusiness Consultants Ltd, an agriculture ministry affiliate. The average soymeal price has fallen about 3 percent to 2,450 yuan (US$296) a tonne over the past week.

Fear of the virus has caused demand for poultry meat among domestic consumers to fall, leading to a decline in prices for corn, another main feed ingredient, the China National Grain & Oils Information Center, a State Grain Administration affiliate, said in a report.

"Although the chances of humans catching bird flu are very low, consumers are nonetheless starting to stay away from poultry," the report said, without giving more details.

Failure to contain the virus could take a toll on the economy in China, where about half of the country's 1.3 billion people depend on grain, livestock and other farm produce for their income.

If the outbreaks aren't brought under control within the next four months, demand for corn could decline by up to 1 million tonnes, pushing prices for the grain into a downtrend, said Li Peng, a Beijing-based analyst with Louis Dreyfus & Cie.

"It's hard to predict the effect because China's never faced such a widespread situation before," he said.

China consumes about 120 million tonnes of corn a year.

Hong Kong, China's biggest poultry market, banned imports of the product from the mainland on Friday. Japan, China's second-largest market for chicken and duck, did the same four days earlier.

China's densely populated financial hub of Shanghai halted trade of live poultry yesterday in a bid to stop the spread of deadly bird flu.

Ten out of 33 regions in the world's most populous nation have confirmed or suspected outbreaks of the avian influenza that has spread to 10 Asian countries and killed at least 10 people in Vietnam and Thailand.

"Shanghai has halted the trading and killing of live poultry at wholesale markets," the Shanghai government said on its Web site, www.shanghai.gov.cn.

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