Required Report - public distribution

**Date:** 3/1/2007

**GAIN Report Number:** CH7016

CH7016

**China, Peoples Republic of**

**Poultry and Products**

**Semi-Annual Report**

**2007**

**Approved by:**

![](media/image1.wmf)Maurice House

U.S. Embassy

**Prepared by:**

Casey Bean, Jianping Zhang

**Report Highlights:**

U.S. broiler meat exports (predominantly frozen broiler cuts, offal,
broiler feet or paws, and processed meat) to Mainland China, including
transshipments via Hong Kong, reached \$337 million in CY 2006, and
broiler feet and paws accounted for 49 percent of China\'s total
imports. The United States became the largest supplier to China again in
2006. Demand for U.S. broiler meat and product will continue to grow in
2007 and beyond. China\'s broiler imports in 2007 are forecast to
increase by 25 percent to 430,000 MT, and China\'s broiler exports in
2007 are forecast to increase by 2 percent to 330,000 MT.

Includes PSD Changes: Yes

Includes Trade Matrix: Yes

Semi-Annual Report

Beijing \[CH1\]

\[CH\]

Table of Contents

[**Executive Summary 3**](#executive-summary)

[Broiler 3](#broiler)

[China's broiler meat production in 2007 forecast to increase by 2
percent to 10.5 MMT, and strong consumer demand will drive imports
3](#chinas-broiler-meat-production-in-2007-forecast-to-increase-by-2-percent-to-10.5-mmt-and-strong-consumer-demand-will-drive-imports)

[Broiler consumption in 2007 forecast to increase by 2 percent to 10.6
MMT
4](#broiler-consumption-in-2007-forecast-to-increase-by-2-percent-to-10.6-mmt)

[Imported broiler products are distributed mostly via wholesale markets
5](#imported-broiler-products-are-distributed-mostly-via-wholesale-markets)

[China broiler imports in 2007 forecast to increase by 25 percent to
430,000 MT
5](#china-broiler-imports-in-2007-forecast-to-increase-by-25-percent-to-430000-mt)

[USDA and U.S. industry timely communication with AQSIQ smooth trade
6](#usda-and-u.s.-industry-timely-communication-with-aqsiq-smooth-trade)

[AQSIQ requires electronic certification starting March 3, 2007
6](#aqsiq-requires-electronic-certification-starting-march-3-2007)

[China states exporting cooked poultry to the U.S., based on imported
raw materials from the U.S. and Canada, is uneconomical
6](#china-states-exporting-cooked-poultry-to-the-u.s.-based-on-imported-raw-materials-from-the-u.s.-and-canada-is-uneconomical)

[Broiler exports in 2007 forecast to increase by 2 percent to 330,000 MT
from previous year's 3 percent decrease
7](#broiler-exports-in-2007-forecast-to-increase-by-2-percent-to-330000-mt-from-previous-years-3-percent-decrease)

[Poultry Eggs 7](#poultry-eggs)

[PS&D table for broiler meat and broiler trade matrix
8](#psd-table-for-broiler-meat-and-broiler-trade-matrix)

# Executive Summary

U.S. broiler shipments to China and transshipments via Hong Kong (i.e.
frozen broiler cuts, offal, broiler feet or paw, processed broiler)
reached \$337 million in CY 2006, and broiler feet and paws accounted
for 49 percent. The United States became the largest supplier to China
again in 2006. Demand for U.S. broiler meat and products remains strong.
This trend is expected to continue in 2007 and beyond, as China's
poultry output will grow slowly due to the continuing impact of highly
pathogenic avian influenza (HPAI).

During December 2006, FAS Beijing hosted the 2^nd^ Sino-U.S. Food Safety
Bilateral workshop in Beijing with the objective to smooth U.S.-China
trade in meat and poultry products. At the meeting, agreement was
reached in several areas aimed to minimize disruption of U.S. exports to
China. China agreed to accept industry e-mailed information (i.e., dates
of export certificates and the numbers) for meat and poultry shipments,
in lieu of their original request that the U.S.-side implement complete
electronic export certification. China also agreed to cooperate in
developing microbiological risk assessment and testing methodologies for
food borne-pathogens. China did not agree to immediately resume imports
of poultry from four U.S. states, i.e., New York, Rhode Island,
Connecticut and Pennsylvania, due to outbreaks of low pathogenic avian
influenza (LPAI)---H5N2---in the four states; however, USDA and the U.S.
poultry industry are working to resolve the issue. Finally, as the
result of USDA-AQSIQ food safety collaboration, China has not "delisted"
any poultry plants since early 2006.

During 2007, FAS Beijing forecasts China's boiler meat production to
increase by 2 percent to 10.5 MMT. China's slow growth in poultry
production will lead to strong import demand in 2007, and broiler
imports in 2007 are forecast at 430,000 MT, a 25 percent increase from
last year. However, broiler product imports will not fully recover to
the level before the HPAI outbreaks in 2003. China's broiler exports in
2007 are forecast to increase by 2 percent to 330,000 MT from a previous
year's 3 percent decrease.

# Broiler

## China's broiler meat production in 2007 forecast to increase by 2 percent to 10.5 MMT, and strong consumer demand will drive imports 

Post forecasts China's broiler production in 2007 will increase by 2
percent over last year to 10.5 MMT. Production of broiler meat is still
recovering from the negative impact of HPAI outbreaks the last couple of
years in China.

China's relatively slow domestic broiler production growth, coupled with
recovering consumption, will drive imports in 2007, thus providing a
good opportunity for the United States to expand broiler exports. For
example, U.S. direct shipments to the Mainland (broiler meat and paws)
in 2006 were almost doubled to 390,748 MT valued at \$298 million.

China's broiler meat and feed conversion ratios have improved from 1:2.5
(i.e., use 2.5 kg of feed to produce 1 kg of broiler meat) in the 8^th^
Five-Year-Plan (1990-1995) to 1:2.0-2.2 currently due to improved feed.
However, China's broiler production is heavily dependent on domestic
corn production, imported soybeans, soy meal products, and imported
fishmeal. Availability of domestic feed grains constrains production as
domestic corn is also used for alcohol and ethanol fuel. Fluctuating
world prices for soybean and soy meal products all translate to
constraints on China's broiler production for the foreseeable future and
continued growth in imports. As evidence, the U.S. Poultry and Egg
Export Council (USAPPEC) estimates U.S. exports to China could rival
Russia by 2009.

FAS Beijing adjusted the forecast for slaughter numbers for 2007 and
2006 slightly up to 7.8 billion and 7.6 billion respectively to reflect
China's average broiler carcass weight (1.35 kg).

Chinese farmers are still concerned about expanding broiler production
because of continued HPAI outbreaks in the neighboring countries, such
as Russia, Japan, South Korea, Thailand and Vietnam, infecting their own
flocks. China imports all grandparent-breeding western bred stocks from
abroad. The Chinese industry says 2006 imports were only slightly higher
than 2005 to 542,000 sets, much lower than that in 2002 (598,000 sets)
and 2003 (571,000 sets) before the HPAI outbreaks. As a result of this
slow growth in breeding stock supplies, China's stock increase in 2007
will continue to be sluggish.

![](media/image2.wmf){width="2.8333333333333335in"
height="2.0097222222222224in"}The two rounds of HPAI outbreaks pushed
broiler prices down by 12 and 15 percent respectively from beginning to
mid 2004 and from September 2005 to June 2006. However, HPAI outbreaks
in 2006 (e.g., 10 outbreaks in 7 provinces with 90,000 birds infected,
47,000 birds dead and 2.9 million birds culled) reduced considerably
compared with 2005 due to China's disease control. According to MOA,
China vaccinates 95 percent of poultry for HPAI, except for commercial
farms that supply processed materials for broiler exports to countries
that request "no vaccination" like Japan. As HPAI outbreaks decline,
poultry consumption started picking up in the latter half of 2006. The
price chart on the left demonstrates Chinese recovering poultry
consumption that has pushed prices up since July 2006.

While helping broiler farmers and processing companies by tax exemptions
during 2006, the Chinese Government has strengthened disease monitoring
at live poultry wet markets. Sellers must now show a certificate to
prove their live poultry come from HPAI-free areas. The State Council's
No. 89 document, issued in December 2006, not only requires
strengthening disease control at live poultry markets, but also requires
replacing live poultry slaughtered at wet markets gradually with poultry
slaughtered at designated slaughterhouses. The Beijing Government took
the lead and has closed down all live poultry markets recently. These
steps indicate that Chinese consumers must eventually change traditional
preferences for on-the-spot-slaughter at wet markets. Limited cold
storage facilities at wet markets will lead to more sales of frozen
products, including imported broiler products.

In January 2007, MOA, Ministry of Health (MOH), Ministry of Finance
(MOF), General Administration of Quality Supervision, Inspection and
Quarantine (AQSIQ) and the State Forestry Administration jointly
announced the National Plan to Build an Animal Disease Prevention
System, 2004-2008. The project will total \$1.1 billion (8.8 billion
RMB) from the Central and local governments. The Government forecasts
this project will prevent \$2.2 billion (17 billion RMB) in economic
losses by controlling major animal diseases including HPAI and FMD. This
project is also aimed to strengthen consumer confidence.

## Broiler consumption in 2007 forecast to increase by 2 percent to 10.6 MMT

Post forecasts China's broiler consumption in 2007 to increase by 2
percent to 10.6 MMT from the estimated 10.4 MMT in 2006. As HPAI
outbreaks decline and consumers have better knowledge how to prevent it,
consumers are becoming desensitized HPAI news. Although domestic
production growth has been slow, large imports have offset the
difference. Consumers also believe that imported products are safer
following the strict inspection and quarantine upon entry into China.
Consumers also select more imported broiler products, as well as more
red meat, during HPAI outbreaks. As a result of increased imports and
decreased exports, combined with consumption recovering, broiler
consumption during 2006 and 2007 is not impacted as bad as expected.

The impacts on consumption from China's HPAI outbreaks also depend on
products and where consumed. Chicken feet or paws, wings, wing tips and
leg cuts were not impacted as much as whole birds and breast meat.
Breast meat is mainly consumed at high-end hotels and restaurants or
western fast food chain restaurants, while the other products are mainly
consumed in homes, low-end restaurants and canteens of schools,
organizations and the military, as well as fast food door-to-door
deliveries. Cooked local breed broilers under 1 kg sold at supermarkets
are also popular.

HPAI outbreaks have impacted spent hen consumption due to the closure of
live poultry markets because most spent hens are sold at these places.
Southern Chinese like local breed, yellow-feathered broilers, while
Northern Chinese like western breed broilers. Consumption of chicken
feet and paws seems more resilient to the HPAI-effect due to traditional
food habits. China has 1.3 billion people, so if each person consumed
one pair of chicken feet or paws, 1.3 billion birds need to be
slaughtered. To make one 25-MT container of chicken feet and paws,
400,000 broilers must be slaughtered. These huge numbers explain why
chicken feet and paw imports account for about 50 percent of China's
total broiler product imports. Please refer CH7006 for more information
on chicken paw, wing and wing tips exports to China.

## Imported broiler products are distributed mostly via wholesale markets

Supermarkets normally charge a lot for marketing promotions, and
small-sized traders are not willing to sell imported broiler product
through supermarkets because these small-sized importers must pay to
obtain import licenses from MOFCOM's identified importing companies.
Poultry imports are subject to both automatic registration form (ARF's)
of the Ministry of Commerce (MOFCOM) and Import Meat Quarantine Permits
(IMQP's) of AQSIQ, further raising costs for imported broiler products.

Imported boiler products are distributed first via the wholesale
terminals like the cold warehouses in Panyu, Guangdong Province, and
Shanghai City, then the products go to wholesale markets in provincial
capital cities, then the products end-up in secondary wholesale markets
in smaller cities. Wholesale prices move in response to international
prices.

## China broiler imports in 2007 forecast to increase by 25 percent to 430,000 MT

Post forecasts China's broiler imports in 2007 to increase by 25 percent
to 430,000 MT from 343,000 MT in 2006. Broiler meat imports (excluding
chicken paws) in 2006 recovered 76 percent of the level prior to the
HPAI outbreaks in 2003, and imports in 2007 are forecast to continue
recovering to 95 percent to 430,000 MT, by comparison with 453,000 MT in
2003. A new trend possibly leading to increased imports is that many
Chinese consumers have shifted to imported broiler meat to substitute
domestic broilers due to HPAI, as they believe imported products are
safer after strict inspection and quarantine when entering China. U.S.
export increases have also been favored by the devalued exchange rate
against the RMB.

The United States is the large supplier to China. U.S. broiler exports
to China could rival Russia by 2009, according to U.S. trade estimates.
China became U.S.'s second largest export market in 2006 with 392,836 MT
for direct shipments based on U.S. data, and U.S. exports to China in
December 2006 already surpassed that to Russia. China's import data and
U.S. export data differ due to smuggling in South China and also
probably because of a lag in China's import reports compared with U.S.
export reports. Although U.S. transshipments of broiler products (meat
and chicken feet or paws) to the Mainland through Hong Kong reduced by 8
percent due to higher prices and strong competition from South America,
increased imports of U.S. broiler products by Mainland China setoff
reduced Hong Kong transshipments in 2006.

During January 2007, China suspended broiler imports from France due to
a recent HPAI outbreak in that country. France is China's 4^th^ largest
supplier. The United States still faces strong competition from Brazil,
though only one company was eligible to export to China in 2006.
Recovering Brazilian domestic demand and a stronger Real against the
U.S. Dollar will also constrain Brazilian exports. Nonetheless, Brazil
is aggressively trying to get China's approval for more Brazilian
poultry plants.

## USDA and U.S. industry timely communication with AQSIQ smooth trade

A critical factor for U.S. exports to China is timely communication
between the Foreign Agricultural Service (FAS) in Beijing with the AQSIQ
and Entry-Exit Inspection and Quarantine Bureaus (CIQ's) at entry ports.
The U.S. industry is encouraged to contact FAS Beijing when there are
problems or to obtain more information. FAS Beijing organized two food
safety bilateral meetings with AQSIQ, led by USDA Under Secretaries and
an AQSIQ Vice Minister. The last food safety bilateral in December 2006
resulted in the signing of a bilateral Memorandum of Cooperation for
food safety issues.

FAS Beijing has also organized seminars and meetings for USAPEEC
representatives and traders to meet with AQSIQ and CIQ officials to
discuss trade technical issues. AQSIQ and USDA officials have also
agreed to meet regularly to discuss bilateral trade issues and concerns.
AQSIQ relisted all the U.S. poultry plants for eligible exports to
China, which were delisted at the beginning of 2006 due to pathogen and
residue detections. AQSIQ no longer delists U.S. plant immediately after
detections and allows a 45-day corrective period.

## AQSIQ requires electronic certification starting March 3, 2007

In an effort to reduce the chronic problem of fake export certificates,
AQSIQ requires that beginning March 3, 2007, U.S. meat plants send an
email message when FSIS certifies a shipment for China. In this interim
pre-notification step (i.e., until USDA's Food Safety Inspection System
(FSIS) implements an official electronic certification system) U.S.
plants are required to e-mail to AQSIQ (<h_cert@ciq.org.cn>) the date
and number of the FSIS meat export health certificate. More information
may be requested by AQSIQ later. FAS will continue to work closely with
FSIS and the industry to encourage the same steps are taken as U.S.
market competitors, Australia and New Zealand, have already implemented
electronic certification with AQSIQ. It is too early to say if the
electronic notification will impact U.S. trade.

## China states exporting cooked poultry to the U.S., based on imported raw materials from the U.S. and Canada, is uneconomical

In April 2006, USDA published the final rule to allow Chinese cooked
poultry into the United States on the condition that the plants use
materials from USDA-approved slaughter plants and processed in AQSIQ
approved Chinese plants. USDA requested that AQSIQ provide a list of
Chinese exporters with contact information and labeling samples.
However, AQSIQ states this trade is not economical and they seek USDA
approval to use Chinese domestic raw materials for processing and export
to the United States. Rising international broiler prices and
international transportation costs, combined with the unfavorable
exchange rate, make re-exports uncompetitive. The issue of cooked
poultry exports to the United States remains China's top market access
priority for agriculture.

## Broiler exports in 2007 forecast to increase by 2 percent to 330,000 MT from previous year's 3 percent decrease

China's exports are forecast to increase only 2 percent to 330,000 MT
from last year's 3 percent decrease. The growth in 2007 is not large as
Japan, China's largest export market, is expected to reduce imports due
to higher stock levels. Japan's "positive list", stricter inspection and
quarantine requirements, already doubled some processing materials and
reduced China's pace of increase in exports in 2006. However, Japan's
recent HPAI outbreaks may help maintain demand for cooked poultry
imports from China.

Russia used to be China's largest export market, but during 2003 Russia
implemented an import quota policy that reduced trade considerably with
China. This will not change in 2007.

China started exporting fresh and chilled poultry to Hong Kong and Macau
in 2006, as both markets reduce their own broiler slaughters due to HPAI
concerns. This trend will continue in 2007.

## 

# Poultry Eggs

China remains the world's largest poultry egg producing country. Post
forecasts China's poultry egg production in 2007 to increase by 3
percent to 30.3 MMT. The China National Statistics Bureau (NSB) just
announced China's 2006 total poultry egg production---29.5 MMT---over 2
percent increase from last year. Table egg production is not impacted by
China's HPAI outbreaks as much as the broiler meat because there are
little substitutes for chicken eggs. Duck and goose eggs are mainly
preserved or salted

  ---------------- -------- -------- -------- -------- -------- -------- ----------
  China Poultry                                                          
  Egg Production,                                                        
  2001-2007 (1,000                                                       
  MT)                                                                    

                   2001     2002     2003     2004     2005     2006     \% Change
                                                                         2006/05

  Total Poultry    23,367   24,627   26,067   27,237   28,795   29,500   2.4
  Egg                                                                    

  Source: China                                                          
  Statistics                                                             
  Bureau                                                                 
  ---------------- -------- -------- -------- -------- -------- -------- ----------

China only imports breeding hatching eggs. China's imports in 2006
increased to 202,320 pieces due to recovering broiler and egg
production. Increased hatching egg imports offset reduced live chicken
breeding stocks in 2006. China's year-on-year hatching egg imports
shot-up from 3,400 pieces in 2005 to 202,320 pieces due to the impact of
HPAI, because breeding farmers are more comfortable to import hatching
eggs than live breeding stocks due to HPAI concerns. The United States
is the second largest hatching egg supplier to China after Hungary.

China mainly exports shelled eggs. Exports in 2007 are forecast to
increase 2 percent to 1.2 million pieces from last year's 1 percent
decrease. Mainland mainly exports to Hong Kong and Macau, accounting for
about 90 percent of China's total egg exports. Constrained availability
of eggs for Hong Kong and Macau from HPAI countries in Asia is forecast
to lead to China's export increase to the two destinations.

# PS&D table for broiler meat and broiler trade matrix

<table style="width:100%;">
<colgroup>
<col style="width: 19%" />
<col style="width: 8%" />
<col style="width: 9%" />
<col style="width: 9%" />
<col style="width: 7%" />
<col style="width: 9%" />
<col style="width: 9%" />
<col style="width: 8%" />
<col style="width: 9%" />
<col style="width: 9%" />
</colgroup>
<tbody>
<tr class="odd">
<td><strong>PSD Table</strong></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr class="even">
<td><strong>Country</strong></td>
<td colspan="3"><strong>China, Peoples Republic of</strong></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr class="odd">
<td><strong>Commodity</strong></td>
<td colspan="3"><strong>Poultry, Meat, Broiler</strong></td>
<td></td>
<td></td>
<td></td>
<td colspan="3">(MIL HEAD)(1000 MT)(PERCENT)</td>
</tr>
<tr class="even">
<td></td>
<td>2005</td>
<td>Revised</td>
<td></td>
<td>2006</td>
<td>Estimate</td>
<td></td>
<td>2007</td>
<td>Forecast</td>
<td></td>
</tr>
<tr class="odd">
<td></td>
<td><p>USDA</p>
<p>Official</p></td>
<td><p>Post</p>
<p>Estimate</p></td>
<td><p>Post</p>
<p>Estimate</p>
<p>New</p></td>
<td><p>USDA</p>
<p>Official</p></td>
<td><p>Post</p>
<p>Estimate</p></td>
<td><p>Post</p>
<p>Estimate</p>
<p>New</p></td>
<td><p>USDA</p>
<p>Official</p></td>
<td><p>Post</p>
<p>Estimate</p></td>
<td><p>Post</p>
<p>Estimate</p>
<p>New</p></td>
</tr>
<tr class="even">
<td><strong>Market Year Begin</strong></td>
<td></td>
<td>01/2005</td>
<td>01/2005</td>
<td></td>
<td>01/2006</td>
<td>01/2006</td>
<td></td>
<td>01/2007</td>
<td>01/2007</td>
</tr>
<tr class="odd">
<td>Inventory (Reference)</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
</tr>
<tr class="even">
<td>Slaughter (Reference)</td>
<td>7550</td>
<td>7550</td>
<td>7550</td>
<td>7620</td>
<td>7620</td>
<td>7640</td>
<td>7700</td>
<td>0</td>
<td>7800</td>
</tr>
<tr class="odd">
<td>Beginning Stocks</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
</tr>
<tr class="even">
<td>Production</td>
<td>10200</td>
<td>10200</td>
<td>10200</td>
<td>10350</td>
<td>10350</td>
<td>10350</td>
<td>10520</td>
<td>0</td>
<td>10520</td>
</tr>
<tr class="odd">
<td>Whole, Imports</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
</tr>
<tr class="even">
<td>Parts, Imports</td>
<td>219</td>
<td>220</td>
<td>219</td>
<td>370</td>
<td>275</td>
<td>343</td>
<td>430</td>
<td>0</td>
<td>430</td>
</tr>
<tr class="odd">
<td>Intra-EU Imports</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
</tr>
<tr class="even">
<td>Other Imports</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
</tr>
<tr class="odd">
<td>Total Imports</td>
<td>219</td>
<td>220</td>
<td>219</td>
<td>370</td>
<td>275</td>
<td>343</td>
<td>430</td>
<td>0</td>
<td>430</td>
</tr>
<tr class="even">
<td>Total Supply</td>
<td>10419</td>
<td>10420</td>
<td>10419</td>
<td>10720</td>
<td>10625</td>
<td>10693</td>
<td>10950</td>
<td>0</td>
<td>10950</td>
</tr>
<tr class="odd">
<td>Whole, Exports</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
</tr>
<tr class="even">
<td>Parts, Exports</td>
<td>331</td>
<td>358</td>
<td>331</td>
<td>350</td>
<td>470</td>
<td>322</td>
<td>365</td>
<td>0</td>
<td>330</td>
</tr>
<tr class="odd">
<td>Intra EU Exports</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
</tr>
<tr class="even">
<td>Other Exports</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
</tr>
<tr class="odd">
<td>Total Exports</td>
<td>331</td>
<td>358</td>
<td>331</td>
<td>350</td>
<td>470</td>
<td>322</td>
<td>365</td>
<td>0</td>
<td>330</td>
</tr>
<tr class="even">
<td>Human Consumption</td>
<td>10088</td>
<td>10062</td>
<td>10088</td>
<td>10370</td>
<td>10155</td>
<td>10371</td>
<td>10585</td>
<td>0</td>
<td>10620</td>
</tr>
<tr class="odd">
<td>Other Use, Losses</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
</tr>
<tr class="even">
<td>Total Dom. Consumption</td>
<td>10088</td>
<td>10062</td>
<td>10088</td>
<td>10370</td>
<td>10155</td>
<td>10371</td>
<td>10585</td>
<td>0</td>
<td>10620</td>
</tr>
<tr class="odd">
<td>Total Use</td>
<td>10419</td>
<td>10420</td>
<td>10419</td>
<td>10720</td>
<td>10625</td>
<td>10693</td>
<td>10950</td>
<td>0</td>
<td>10950</td>
</tr>
<tr class="even">
<td>Ending Stocks</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
</tr>
<tr class="odd">
<td>Total Distribution</td>
<td>10419</td>
<td>10420</td>
<td>10419</td>
<td>10720</td>
<td>10625</td>
<td>10693</td>
<td>10950</td>
<td>0</td>
<td>10950</td>
</tr>
<tr class="even">
<td>CY Imp. from U.S.</td>
<td>147</td>
<td>147</td>
<td>147</td>
<td>272</td>
<td>175</td>
<td>254</td>
<td>301</td>
<td>0</td>
<td>301</td>
</tr>
<tr class="odd">
<td>CY Exp. to U.S.</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
</tr>
<tr class="even">
<td>Balance</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
</tr>
<tr class="odd">
<td>Inventory Balance</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
</tr>
<tr class="even">
<td>Production Change</td>
<td>2</td>
<td>0</td>
<td>2</td>
<td>1</td>
<td>1</td>
<td>1</td>
<td>2</td>
<td>-100</td>
<td>2</td>
</tr>
<tr class="odd">
<td>Import Change</td>
<td>26</td>
<td>0</td>
<td>26</td>
<td>69</td>
<td>25</td>
<td>57</td>
<td>16</td>
<td>-100</td>
<td>25</td>
</tr>
<tr class="even">
<td>Export Change</td>
<td>37</td>
<td>0</td>
<td>37</td>
<td>6</td>
<td>31</td>
<td>-3</td>
<td>4</td>
<td>-100</td>
<td>2</td>
</tr>
<tr class="odd">
<td>Trade Balance</td>
<td>112</td>
<td>138</td>
<td>112</td>
<td>-20</td>
<td>195</td>
<td>-21</td>
<td>-65</td>
<td>0</td>
<td>-100</td>
</tr>
<tr class="even">
<td>Consumption Change</td>
<td>2</td>
<td>0</td>
<td>2</td>
<td>3</td>
<td>1</td>
<td>3</td>
<td>2</td>
<td>-100</td>
<td>2</td>
</tr>
</tbody>
</table>

## 

  ------------------ ------------ ------------- ------------- -------------
  China Broiler Meat                                          
  Imports, 2004-2006                                          
  (Metric Tons)                                               

                     Jan-Dec      Jan-Dec       Jan-Dec       Jan - Dec

  Origin             Quantity     Quantity      Quantity      \% Change

                     2004         2005          2006          2006/2005

  World              180,071      370,873       572,218       54.29

  United States      75,645       196,659       390,748       98.69

  Brazil             60,810       142,872       142,812       -0.04

  Argentina          42,587       24,188        27,702        14.53

  Chile              0            2,502         9,044         261.47

  France             0            1,659         1,266         -23.69

  Philippines        0            59            488           727.12

  Canada             775          2,758         150           -94.56

  Thailand           173          122           0             -100.00

  Other              81           54            8             -85.19

  HS Code: 020711,                                            
  020712, 020713,                                             
  020714 and 160232                                           

  Note: China                                                 
  chicken paw                                                 
  imports under HS                                            
  Code 02071422 is                                            
  included in this                                            
  table, but                                                  

  excluded in the                                             
  PS&D table.                                                 

  Source: WTA/GTA                                             
  China Customs                                               
  Statistics                                                  
  ------------------ ------------ ------------- ------------- -------------

  ------------------ ------------ ------------- ------------- -------------
  China Chicken Paw                                           
  Imports, 2004-2006                                          
  (Metric Tons)                                               

                     Jan-Dec      Jan-Dec       Jan-Dec       Jan - Dec

                     Quantity     Quantity      Quantity      \% Change

  Origin             2004         2005          2006          2006/2005

  World              n/a          189,178       289,171       52.86

  United States      n/a          103,211       156,974       52.09

  Brazil             n/a          60,724        98,851        62.79

  Argentina          n/a          23,138        26,907        16.29

  Chile              n/a          2,034         6,439         216.57

  Other              n/a          71            0             -100.00

  HS Code: 020714.22                                          

  Source: WTA/GTA                                             
  China Customs                                               
  Statistics                                                  
  ------------------ ------------ ------------- ------------- -------------

  ------------------ ------------ ------------- ------------- -------------
  Hong Kong Broiler                                           
  Re-Exports to                                               
  China, 2004-2006                                            

  (Metric Tons)                                               

                     Jan-Dec      Jan-Dec       Jan-Dec       Jan - Dec

                     Quantity     Quantity      Quantity      \% Change

  Origin             2004         2005          2006          2006/2005

  World              104,653      105,503       177,393       68.14

  Brazil             32,506       43,202        113,420       162.53

  United States      44,638       41,937        38,682        -7.76

  Argentina          7,371        5,284         11,454        116.77

  Chile              3,304        5,068         7,720         52.33

  Iran               2,260        3,710         2,352         -36.60

  France             2,067        728           932           28.02

  Canada             2,273        404           273           -32.43

  United Kingdom     2,435        268           199           -25.75

  Other              7,799        4,902         2,361         -51.84

  HS Code: 020711,                                            
  020712, 020713,                                             
  020714 and 160232                                           

  Note: China                                                 
  chicken paw                                                 
  imports under HS                                            
  Code 02071410 is                                            
  included in this                                            
  table, but                                                  

  excluded in the                                             
  PS&D table.                                                 

  Source: WTAWTA                                              
  from Hong Kong                                              
  Census and                                                  
  Statistics                                                  
  Department                                                  
  ------------------ ------------ ------------- ------------- -------------

  ------------------ ------------ ------------- ------------- -------------
  Hong Kong Chicken                                           
  Paw Re-Exports to                                           
  China, 2004-2006                                            
  (2004-2006)                                                 

                     Jan-Dec      Jan-Dec       Jan-Dec       Jan - Dec

                     Quantity     Quantity      Quantity      \% Change

  Origin             2004         2005          2006          2006/2005

  World              54,515       68,407        117,087       71.16

  Brazil             15,518       24,223        74,345        206.92

  United States      23,327       27,803        23,658        -14.91

  Argentina          6,234        4,987         11,112        122.82

  Chile              1,213        3,630         4,731         30.33

  Iran               2,233        3,710         1,947         -47.52

  Canada             825          176           23            -86.93

  Turkey             3,096        3,215         0             -100.00

  Other              2,069        663           1,271         91.70

  HS Code: 020714.10                                          

  Source: WTA Hong                                            
  Kong Census and                                             
  Statistics                                                  
  Department                                                  
  ------------------ ------------ ------------- ------------- -------------

+-----------------+-----------+------------+------------+------------+
| China Broiler   |           |            |            |            |
| Meat Exports,   |           |            |            |            |
| 2004-2006       |           |            |            |            |
| (Metric Tons)   |           |            |            |            |
+-----------------+-----------+------------+------------+------------+
|                 | Jan-Dec   | Jan-Dec    | Jan-Dec    | Jan - Dec  |
+-----------------+-----------+------------+------------+------------+
| Destination     | Quantity  | Quantity   | Quantity   | \% Change  |
+-----------------+-----------+------------+------------+------------+
|                 | 2004      | 2005       | 2006       | 2006/2005  |
+-----------------+-----------+------------+------------+------------+
| World           | 240,960   | 331,524    | 321,761    | -2.94      |
+-----------------+-----------+------------+------------+------------+
| Japan           | 136,516   | 178,411    | 196,282    | 10.02      |
+-----------------+-----------+------------+------------+------------+
| Hong Kong       | 61,868    | 88,569     | 91,892     | 3.75       |
+-----------------+-----------+------------+------------+------------+
| Korea South     | 1,989     | 8,673      | 12,320     | 42.05      |
+-----------------+-----------+------------+------------+------------+
| Bahrain         | 2,825     | 4,272      | 4,821      | 12.85      |
+-----------------+-----------+------------+------------+------------+
| United States   | 1,197     | 4,154      | 3,027      | -27.13     |
+-----------------+-----------+------------+------------+------------+
| Macau           | 1,051     | 1,739      | 2,001      | 15.07      |
+-----------------+-----------+------------+------------+------------+
| Iraq            | 1,465     | 2,062      | 1,593      | -22.74     |
+-----------------+-----------+------------+------------+------------+
| Singapore       | 1,442     | 1,483      | 1,409      | -4.99      |
+-----------------+-----------+------------+------------+------------+
| Somalia         | 3,680     | 3,796      | 1,323      | -65.15     |
+-----------------+-----------+------------+------------+------------+
| Kenya           | 0         | 293        | 1,170      | 299.32     |
+-----------------+-----------+------------+------------+------------+
| Maldives        | 345       | 651        | 1,021      | 56.84      |
+-----------------+-----------+------------+------------+------------+
| Albania         | 4,273     | 5,430      | 545        | -89.96     |
+-----------------+-----------+------------+------------+------------+
| Georgia         | 835       | 1,873      | 406        | -78.32     |
+-----------------+-----------+------------+------------+------------+
| Armenia         | 50        | 1,969      | 96         | -95.12     |
+-----------------+-----------+------------+------------+------------+
| Moldova         | 1,029     | 8,237      | 0          | -100.00    |
+-----------------+-----------+------------+------------+------------+
| Korea North     | 3,834     | 5,003      | 0          | -100.00    |
+-----------------+-----------+------------+------------+------------+
| Azerbaijan      | 739       | 2,847      | 0          | -100.00    |
+-----------------+-----------+------------+------------+------------+
| Mozambique      | 204       | 2,592      | 0          | -100.00    |
+-----------------+-----------+------------+------------+------------+
| Uzbekistan      | 200       | 1,267      | 0          | -100.00    |
+-----------------+-----------+------------+------------+------------+
| Other           | 17,763    | 9,147      | 3,855      | -57.86     |
+-----------------+-----------+------------+------------+------------+
| HS Code:        |           |            |            |            |
| 020711, 020712, |           |            |            |            |
| 020713, 020714  |           |            |            |            |
| and 160232      |           |            |            |            |
|                 |           |            |            |            |
| Note: No        |           |            |            |            |
| exports of      |           |            |            |            |
| chicken paws    |           |            |            |            |
|                 |           |            |            |            |
| Source: WTA/GTA |           |            |            |            |
| China Customs   |           |            |            |            |
| Statistics      |           |            |            |            |
+-----------------+-----------+------------+------------+------------+

  --------------- --------------------- ------ ------ ------ ------ ------ ------ ------ ---------
  China Import                                                                           
  M.F.N Tariff                                                                           
  Rate on Frozen                                                                         
  Chicken                                                                                
  Products,                                                                              
  2001-2007 Based                                                                        
  on Weight                                                                              

  (Unit: RMB/KG)                                                                         
  (\$1=RMB7.76)                                                                          

                                                                                         \% Change

  HS Code                               2001   2002   2003   2004   2005   2006   2007   2005/04

  2007.1200       Frozen whole broiler  1.6    1.6    1.3    1.3    1.3    1.3    1.3    0.00

  0207.1411       Frozen broiler cuts   1.2    1.0    0.8    0.6    0.6    0.6    0.6    0.00
                  with bones                                                             

  0207.1419       Frozen broiler cuts,  2.7    1.5    1.2    1.0    1.0    1.0    1.0    0.00
                  boneless                                                               

  0207.1421       Frozen broiler wings  2.3    1.2    1.0    0.9    0.9    0.8    0.8    11.11

  0207.1422       Frozen chicken paws   1      0.8    0.6    0.5    0.5    0.5    0.5    0.00

  0207.1429       Frozen chicken                                    0.5    0.5    0.5    \-
                  wingtips, livers                                                       

  \* 0207.2900    Frozen wingtips,      1      0.8    0.6    0.5    n/a    n/a    n/a    \-
                  paws, liver                                                            

  0504.0021       Broiler gizzard       1.7    1.7    1.4    1.4    1.4    1.3    1.3    0.00

  Source: China                                                                          
  Customs                                                                                

  \* Note: Since                                                                         
  January 1,                                                                             
  2005, China                                                                            
  Customs created                                                                        
  a new HS Code                                                                          
  (0207.1422) for                                                                        
  chicken paws                                                                           

  and a new HS                                                                           
  Code                                                                                   
  (0207.1429) for                                                                        
  chicken                                                                                
  wingtips and                                                                           
  livers instead                                                                         
  of HS Code                                                                             
  02072900 which                                                                         

  contained all                                                                          
  the three                                                                              
  products in the                                                                        
  past.                                                                                  
  --------------- --------------------- ------ ------ ------ ------ ------ ------ ------ ---------

  ---------------- ---------- --------- --------- --------- --------------
  CHINA WHOLESALE                                           
  BROILER MEAT                                              
  PRICES ON                                                 
  AVERAGE                                                   

  2004-2007                                                 
  (US\$/KG,                                                 
  \$1=RMB7.76)                                              

                                                            \% Change

                   2004       2005      2006      2007      2007/06

  January          1.01       1.03      0.93      1.14      22.58

  February         0.92       1.03      0.94      1.18      25.53

  March            0.97       1.11      0.90                

  April            0.96       1.10      0.90                

  May              0.95       1.12      0.92                

  June             0.98       1.11      0.89                

  July             1.05       1.05      0.93                

  August           1.09       1.06      1.00                

  September        1.12       1.09      1.08                

  October          1.13       1.01      1.13                

  November         1.06       0.92      1.16                

  December         0.97       0.91      1.12                

  Source: The                                               
  Ministry of                                               
  Agriculture                                               
  ---------------- ---------- --------- --------- --------- --------------

+---------------+----------+---------+--------+--------+-------------+
| CHINA         |          |         |        |        |             |
| WHOLESALE     |          |         |        |        |             |
| LIVE CHICKEN  |          |         |        |        |             |
| PRICES ON     |          |         |        |        |             |
| AVERAGE       |          |         |        |        |             |
|               |          |         |        |        |             |
| 2004-2007     |          |         |        |        |             |
| (US\$/KG,     |          |         |        |        |             |
| \$1=RMB7.76)  |          |         |        |        |             |
+---------------+----------+---------+--------+--------+-------------+
|               |          |         |        |        | \% Change   |
+---------------+----------+---------+--------+--------+-------------+
|               | 2004     | 2005    | 2006   | 2007   | 2007/06     |
+---------------+----------+---------+--------+--------+-------------+
| January       | 1.10     | 1.13    | 0.87   | 1.27   | 45.98%      |
+---------------+----------+---------+--------+--------+-------------+
| February      | 1.02     | 1.17    | 1.11   | 1.24   | 11.71%      |
+---------------+----------+---------+--------+--------+-------------+
| March         | 0.98     | 1.21    | 1.00   |        |             |
+---------------+----------+---------+--------+--------+-------------+
| April         | 1.07     | 1.28    | 1.02   |        |             |
+---------------+----------+---------+--------+--------+-------------+
| May           | 1.13     | 1.33    | 0.98   |        |             |
+---------------+----------+---------+--------+--------+-------------+
| June          | 1.18     | 1.2     | 0.95   |        |             |
+---------------+----------+---------+--------+--------+-------------+
| July          | 1.21     | 1.16    | 0.91   |        |             |
+---------------+----------+---------+--------+--------+-------------+
| August        | 1.24     | 1.18    | 1.04   |        |             |
+---------------+----------+---------+--------+--------+-------------+
| September     | 1.22     | 1.22    | 1.03   |        |             |
+---------------+----------+---------+--------+--------+-------------+
| October       | 1.21     | 1.08    | 1.23   |        |             |
+---------------+----------+---------+--------+--------+-------------+
| November      | 1.17     | 0.98    | 1.22   |        |             |
+---------------+----------+---------+--------+--------+-------------+
| December      | 1.22     | 0.97    | 1.17   |        |             |
+---------------+----------+---------+--------+--------+-------------+
| Source: The   |          |         |        |        |             |
| Ministry of   |          |         |        |        |             |
| Agriculture   |          |         |        |        |             |
+---------------+----------+---------+--------+--------+-------------+

  ---------------- ---------- --------- --------- --------- --------------
  CHINA\'S                                                  
  WHOLESALE                                                 
  CHICKEN EGG                                               
  PRICES                                                    

  ON AVERAGE                                                
  2004-2007                                                 
  (US\$/KG,                                                 
  \$1=rmb 7.76)                                             

                                                            \% Change

                   2004       2005      2006      2007      2007/06

  January          0.63       0.69      0.58      0.7       20.69%

  February         0.55       0.68      0.57      0.77      35.09%

  March            0.60       0.64      0.54                

  April            0.58       0.64      0.54                

  May              0.59       0.72      0.54                

  June             0.66       0.71      0.55                

  July             0.67       0.71      0.59                

  August           0.74       0.74      0.65                

  September        1.92       0.72      0.74                

  October          0.71       0.67      0.72                

  November         0.68       0.62      0.74                

  December         0.68       0.61      0.75                

  Source: The                                               
  Ministry of                                               
  Agriculture                                               
  ---------------- ---------- --------- --------- --------- --------------