China aids exports to Iraq

By Mark Godfrey

- Last updated on GMT

Iraq has been earmarked as an area of export growth
Iraq has been earmarked as an area of export growth

Related tags: Central asia, China, Livestock

One of America’s biggest poultry firms has secured exports to Iraq – thanks to help from China. 

China’s export quality inspection body, the general administration of quality supervision, inspection and quarantine (AQSIQ), is taking credit for helping a Chinese wing of the OSI Group win export sales to Iraq this summer.

Fuxi Nongmu Development Co near Weihai in Shandong province on China’s east coast shipped 28,000 tonnes of frozen poultry worth US$37,800 (£28,860) to Iraq “for the first time for any company from Weihai”​ according to AQSIQ.

Described as a “fully vertically integrated poultry”​ operation OSI Group (Weihai) Poultry Development Co is one of several breeding and processing plants in China operated by OSI, which entered China in 1991 by opening a meat processing plant in Beijing.

Long a key supplier for fast food chains like McDonald’s and KFC in China, OSI however was at the centre of a scandal over allegedly substandard meat which ended in a ruling against the firm by a Shanghai court early this year.

However all seems to be forgiven, according to the AQSIQ which claims some of the credit for organising training and briefings for poultry companies in Weihai, advising them on how to upgrade their facilities and how to get accredited to international quality schemes like HACCP.

Overall, things appear to be coming together for Chinese poultry industry plans to increase exports into the middle east and central Asia: this has been a stated goal nationally of the AQSIQ which acts as an advisor and guarantor of standards at Chinese exporters, whipping them into line to ensure export standards are met.

Afghanistan is proving a market for Guangdong San Feng Qin Ye, a poultry processor in Meizhou in the south of the country which this summer shipped 52,000 tonnes worth US$83,200 of frozen poultry products to Afghanistan – a neighbour of China on its western front.

Meizhou authorities have targeted “Southeast Asia, central Asia and the Halal market”​, according to the local AQSIQ office, which claims to have provided technical and marketing advice to firms in the city. Located in Guangdong province, a traditional poultry breeding heartland, Meizhou poultry firms have struggled for competitiveness against a handful of giants which have vertically integrated and grabbed control of the domestic market.

“Identifying export markets is crucial for us,”​ said an AQSIQ statement, adding that the agency’s priority remains getting all firms HACCP compliant. Chinese exports may edge out US poultry firms, which had controlled up to 80% of Afghanistan’s growing import market in 2015.

While it’s become a major market for Brazilian poultry export in particular China remains a net exporter of poultry meat. Exports will be largely flat at 400,000 tonnes while imports will total 350,000 tonnes this year (this would represent a 31% increase from 2015 figures), according to projections by the US Department of Agriculture (USDA).

There are questions over China’s ability to significantly grow exports. It is the fifth largest broiler meat exporter to the world (it trails Brazil, the United States, the EU, and Thailand), clocking up 420,000 metric tonnes in 2015. But China’s production has stalled due to a ban on imported grandfather and breeding stock from key suppliers France and the US.

Over 80% of Chinese exports go to Japan, Hong Kong, and Malaysia, a key halal market. A Chinese culinary preference for wings and legs means there’s a surplus of breast meat which is bought up by Japanese fast food chain Yoshinoya among others.

The average retail price of chicken rose by 1.1% in the first five months of 2016 compared to last year while key local players like Fujian Sunner Group have been concentrating less on exports and more on increasing output of cooked poultry products to meet rising demand from the convenience foods sector.

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