Fresh, chilled and frozen chicken are commodities that Thailand can still make good profit from in China, even though closures of key Chinese trade ports to control the spread of COVID-19 from post-Chinese New Year to mid-February 2020 led to some delays and suspension of shipments of fresh, chilled and frozen chicken from Thailand to China. In fact, the amount of chicken exports to China over the first two months of 2020 expanded by 31.4 percent YoY.
KResearch views that exports of fresh, chilled and frozen chicken during 1H20 have so far been supported by preorders prior to China's lockdown and orders that gradually came in after the reopening of the trading ports. Challenges posed by domestic factors may cause growth during the second quarter to slow. For 2H20, one growth-inducing factor comes from the possibility that 12 more chicken-processing factories in Thailand will be granted certifications from China, opening up opportunities for receiving more orders to warrant boosting production capacity, increasing exports as well as continuous consumption in China.
While this year's export trends for fresh, chilled and frozen Thai chicken continue to have a bright outlook, the challenges which set this year apart in terms of Thai chicken product exports to China are: 1) Increasing competition as a result of China opening its chicken market to new competitors – which may not have much of an impact this year but may affect the longer-term period following the resolution of the COVID-19 outbreak; and, 2) The growth of the Chinese economy will tend to decelerate as a result of the COVID-19 outbreak.
KResearch expects that exports of fresh, chilled and frozen chicken to China in 2020 will likely amount of USD 266-277 million, for an expansion of 20-25 percent YoY. Though economic growth has slowed as result of a high base effect from the preceding year, the rate of economic expansion remains considerably good, and chicken product exports continue to be promising in the Chinese market for the remainder of the year.