Report warns bird flu could cause world meat trade crisis

Nov 8 2005

According to the latest report by the Food and Agriculture Organisation (FAO), one of the effects of a major outbreak of bird flu in the Europe would be higher world market prices for poultry.

If exports for the European Union's poultry flock, worth $1 billion, were closed that would force domestic prices lower but push up world market levels, said the UN agency.

Apparently potential trade bans in the event of a widespread avian influenza outbreak in the 25-nation EU bloc, the source of 13 percent of global poultry output, were already unsettling world markets.

Recent outbreaks in Europe have raised considerable concerns about the impact on the industry.

The report distributed at the current bird flu conference in Geneva, says that international poultry prices could be expected to move up sharply, and products intended for export would swamp local markets.

Apparently the FAO's economic model has combined the impact of bird flu in Europe with the recent outbreak of foot-and-mouth disease (FMD) in Brazil, the world's largest meat exporter.

It is expected that the potential short-term impact would be higher meat prices for all meats on world markets, ranging from 7-8 percent for poultry and beef and 3 percent for pork.

It seems that restrictions on exports from Asia during 2004 and the first half of 2005 have contributed to a 20 percent rise in world poultry prices, in contrast to sharply declining domestic prices in disease-affected countries.

An 8 percent decline in international poultry trade over the period and that limitations on fresh/chilled products from Thailand and China in particular have caused Asian exports to fall to less than 1 million tonnes in the 2004/05 period, down from 1.8 million in 2003.

The report does however say it expects any drop in demand to be short-lived as consumers became aware of the minimal risk of bird flu transmission through meat consumption.

Africa, a region, also at risk from the bird flu virus itself due to migratory bird patterns, would be one export market particularly hard hit as almost 50% of it's meat is imported from Europe.