THAI broiler producers have returned to profit in 2019, and further growth of the sector is expected this year.

The country is forecast to produce 3.05m metric tonnes of poultrymeat this year, a 4% increase year-on-year, according to a new USDA analysis.

Domestic consumption is predicted to rise 3%, and exports will grow about 7%, the report adds, with most new business going to non-EU countries like Japan, South Korea and China.

Broiler producer prices have lifted, recovering from 30.0 baht/kg (US $0.44/pound) in December 2018 to 34.69 baht/kg (US $0.52/pound) in July 2019.

This is down to increased export demand and lower production within independent chick breeding farms.

Thailand has about 10-12 integrated processors accounting for about 80% of domestic production, with the rest made up of smaller, independent broiler growers. A number of these have built their own slaughterhouses to develop domestic markets in the past year, according to the report.

While it is not a low-cost producer, the country has developed its efficiency in recent years. Birds are typically grown to 2.4-2.5kg to 40-42 days. FCR is about 1:1.6-1:1.7.

China opened its market to Thai chicken in 2017, and has approved 7 of 19 plants audited by Chinese authorities.

Exports to the EU increased by 8 percent from 126,275 MT in 2018 (Jan-Jul) to 136,549 MT in 2019 (Jan-Jul) because several buyers in the EU built up their own stocks in preparation for Brexit, according to the USDA report.

“Thailand is not a low-cost producing country due mainly to market distortion from domestic feed ingredients and increasing labour costs,” it says.

“However, Thailand successfully increased its exports over the years and this trend is likely to continue because of improving farm productivities, strict animal disease and food safety control, and sophisticated development of end-products.”

Tyson Foods bought production facilities in Thailand earlier this year, while Charoen Pokphand Food Public Company (CPF), Thailand’s largest poultry producer, took a share in Poland’s third-largest poultry producer to enhance its sales to the EU.