Market Trends of middle east poultry meat Industry
Increased domestic poultry production is driving the market's growth
- Saudi Arabia is the largest producer of poultry in the Middle East, accounting for about 71.27% of the region's total poultry production in 2022. Domestic poultry production in the country reached more than 60% self-sufficiency level in 2022. The Saudi Ministry of Environment, Water, and Agriculture (MEWA) announced plans to collaborate with the private sector to increase that level to more than 85% by 2030. The government has also been actively working to remove obstacles for producers to acquire and use the land for poultry production, provide loans for equipment purchases, and reform its subsidy system for feed, livestock, and poultry.
- In 2022, Saudi's local chicken meat production reached 910,000 metric tons, an increase of 12.09% from 2020, mainly due to the expansion of production facilities of the largest chicken producers, such as Al Watania Poultry Farms and Alyoum Chicken Farm. The expansion project will increase these farms' daily production from 850,000 to one million chickens per day.
- Poultry production in the United Arab Emirates reached 56,000 metric tons (MT) in 2022. Increasing feed prices and other inputs and a government-set price ceiling on fresh chicken at retail outlets have stopped further production increases. Moreover, the country's limited agriculture is concentrated in Abu Dhabi, where most poultry production occurs. Local poultry farmers, particularly larger and medium-sized producers, have implemented improved biosecurity procedures to reduce the risk of contagious poultry diseases. Some well-managed poultry producers have achieved a 2.5% or lower mortality rate, which has increased output while significantly reducing overall production costs.
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Rising production costs are impacting poultry prices
- In the Middle East, the cost of poultry increased by 0.92% in 2022. The region has seen an increase in local production. The majority of locally produced chicken meat is chilled, expensive, and consumed primarily by the local population. Price controls have unintentionally favored cheaper, non-fresh imported poultry products. The UAE government imposed a price ceiling on regional coops and other retail enterprises that sell primarily to the UAE community. The price cap also impacted the profitability of chicken farms because farms could not boost prices to keep up with the rising costs. All fresh chicken sold within the United Arab Emirates is subject to a price cap set by the government at USD 5.85 + VAT, which shops are not allowed to exceed.
- For a decade, Kuwait has been dealing with a shortage of poultry products, which is set to increase the price of poultry in the country further. The shortage of poultry is caused by local poultry companies that deliberately refrained from providing supermarkets with their products in order to increase their prices, which rose by 20% in June 2022. Notably, Saudi Arabian poultry exports have not increased in 2022, while Bahraini exports have fallen dramatically, as both countries face higher feed costs (both are dependent on imported feed and other inputs).
- The Russia-Ukraine war was also responsible for the price increase in 2022, with some poultry companies raising their prices due to rising feed costs. The Kuwaiti government’s support only covers corn and does not cover other feeds, such as soy, vitamins, and salts, and these prices have risen globally. Globally, the price of a ton of soy increased from USD 450 to 900 in just a month in March 2022. Thus, these factors have boosted the price of poultry in the region.
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