Bird flu has savaged China's multibillion dollar poultry industry and if not brought under control soon threatens to wipe out the entire sector, leaving millions of farmers without income, analysts say.
As countries have slapped bans on China's poultry shipments, the impact has spread across the whole industry, with some officials estimating losses at more than 100 billion yuan (US$12 billion).
PHOTO: REUTERS
Supermarkets and fastfood chain sales have slumped, processors have warned of losses and potential layoffs and millions of impoverished small farmers are losing a valuable source of income as their birds are slaughtered.
"The fallout of the bird flu is disastrous and it will take at least half a year for China to return to its 2002 level of exports even if the virus is put under control immediately," warned Lin Xiangjin, agricultural research fellow with the Chinese Academy of Social Sciences.
China's poultry industry was worth around 242 billion yuan last year, official statistics show.
It is the world's fifth largest exporter and shipped out poultry products worth some US$900 million in 2002, according to the UN's Food and Agriculture Organization.
"The [poultry] sector was basically unscathed by the SARS outbreak last year, but it's seems to be our turn this time with the bird flu attack," said Gong Guifeng, an official at China Association of Animal Husbandry (CAAH).
"The knock-on effects have already started to spread across the whole poultry supply chain. Poultry suppliers, feedstuff producers and chicken farms have all been devastated," Gong said.
Chen Xiwen, deputy director with the government's Central Financial Work Leading Group, added that the damage was only likely to get worse.
Although millions of farmers across China raise poultry on a small scale to supply local markets, the main farming and processing bases are concentrated in five provinces -- Shandong, Guangdong, Liaoning, Jilin and Sichuan.
The CAAH estimates major producers such as Dalian Hanwei Group, Wen's Group, and Huadu Roiler Corp, are each posting monthly losses of over 100 million yuan, and will be forced to shutter production if the virus continues unchecked.
Huadu spokesman Chen Yuanfeng said the company's chicken exports, which normally run at 700 tonnes per month, have crashed to zero and the firm is considering laying off workers in an effort to cut expenses.
In the meantime, listed poultry breeders and suppliers, including ST Shenzhen Kondarl (Group) Co, Daying Modern Agriculture Co Ltd and Inner Mongolia Prairie XingFa Co have all warned of the impact of the outbreak on profits.
"We have definitely been hit by the virus, but it is difficult to quantify the impact at the present stage," ST Shenzhen Kondarl official Zhang Minghua said.
Mainland feedstuff producers, such as Sichuan New Hope Agribusiness Co, have also been mauled by decreasing demand for their products in China and key overseas markets.
In China, where urban consumers are becoming increasingly wary of buying raw chicken or even cooked chicken, domestic poultry sales have also fallen, with sales in some areas plunging by as much as 60 percent, Gong said.
ISSUES: Gogoro has been struggling with ballooning losses and was recently embroiled in alleged subsidy fraud, using Chinese-made components instead of locally made parts Gogoro Inc (睿能創意), the nation’s biggest electric scooter maker, yesterday said that its chairman and CEO Horace Luke (陸學森) has resigned amid chronic losses and probes into the company’s alleged involvement in subsidy fraud. The board of directors nominated Reuntex Group (潤泰集團) general counsel Tamon Tseng (曾夢達) as the company’s new chairman, Gogoro said in a statement. Ruentex is Gogoro’s biggest stakeholder. Gogoro Taiwan general manager Henry Chiang (姜家煒) is to serve as acting CEO during the interim period, the statement said. Luke’s departure came as a bombshell yesterday. As a company founder, he has played a key role in pushing for the
China has claimed a breakthrough in developing homegrown chipmaking equipment, an important step in overcoming US sanctions designed to thwart Beijing’s semiconductor goals. State-linked organizations are advised to use a new laser-based immersion lithography machine with a resolution of 65 nanometers or better, the Chinese Ministry of Industry and Information Technology (MIIT) said in an announcement this month. Although the note does not specify the supplier, the spec marks a significant step up from the previous most advanced indigenous equipment — developed by Shanghai Micro Electronics Equipment Group Co (SMEE, 上海微電子) — which stood at about 90 nanometers. MIIT’s claimed advances last
EUROPE ON HOLD: Among a flurry of announcements, Intel said it would postpone new factories in Germany and Poland, but remains committed to its US expansion Intel Corp chief executive officer Pat Gelsinger has landed Amazon.com Inc’s Amazon Web Services (AWS) as a customer for the company’s manufacturing business, potentially bringing work to new plants under construction in the US and boosting his efforts to turn around the embattled chipmaker. Intel and AWS are to coinvest in a custom semiconductor for artificial intelligence computing — what is known as a fabric chip — in a “multiyear, multibillion-dollar framework,” Intel said in a statement on Monday. The work would rely on Intel’s 18A process, an advanced chipmaking technology. Intel shares rose more than 8 percent in late trading after the
GLOBAL ECONOMY: Policymakers have a choice of a small 25 basis-point cut or a bold cut of 50 basis points, which would help the labor market, but might reignite inflation The US Federal Reserve is gearing up to announce its first interest rate cut in more than four years on Wednesday, with policymakers expected to debate how big a move to make less than two months before the US presidential election. Senior officials at the US central bank including Fed Chairman Jerome Powell have in recent weeks indicated that a rate cut is coming this month, as inflation eases toward the bank’s long-term target of two percent, and the labor market continues to cool. The Fed, which has a dual mandate from the US Congress to act independently to ensure
RSS