Market Trends of saudi arabia poultry meat Industry
The production in the country is expected to be boosted as a part of Vision 2030
- Saudi Arabia is the largest producer of poultry meat in the Middle East, accounting for around 71% of the region's poultry production in 2022. Poultry meat production gradually increased by 51.6% from 2017 to 2022. Saudi Arabia's self-sufficiency in chicken meat climbed from 45% in 2016 to 68% in 2022.
- The mortality rate of chicken meat has declined in the past five years by around 8%, leading to an increase in the production rate in poultry farms in Saudi Arabia. Government intervention in production support, interest-free loans, and rebates on poultry equipment has reduced overall production costs, thus increasing the number of poultry farms across the country. Owing to these factors, various international manufacturers are investing in the country. For instance, in 2022, local poultry company Tanmiah Food Company and MHP SE of Ukraine entered into a new memorandum of understanding, which offered the potential to help raise the contribution of domestic poultry production to the Kingdom’s overall consumption. Similarly, in 2023, Brazil-based BRF launched a new joint venture in Saudi Arabia through one of its subsidiaries to meet the country's aim of halal chicken production.
- The production of poultry meat is anticipated to increase because of the initiatives taken by the Saudi Ministry of Environment, Water, and Agriculture (MEWA) and the Saudi Food and Drug Authority (SFDA). The ministry aims to provide various incentives up to USD 187 million annually. Under Vision 2030, the government encourages foreign companies to invest in poultry farms with 100% ownership of local farms. Through this move, production is expected to increase by 80% in 2025 and 100% in 2030. The Saudi Food and Drug Authority restricts the export and import of poultry meat to boost local production.
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Poultry prices saw a hike to compensate for the rise in production costs
- The prices of poultry meat increased by 7.84% from 2017 to 2022 in Saudi Arabia. Poultry meat is one of the most consumed animal proteins in Saudi Arabia. In 2022, prices increased to USD 3,426 per ton, mainly due to increased dependency on poultry feed from other countries like Brazil and France. Almost 80% of the poultry meat is currently produced by 12 businesses, including three major firms and seven medium-sized firms. National Company, the biggest meat producer in the region, accounts for one-third of domestic production, followed by Fakeeh and Almarai.
- In January 2022, national poultry companies increased the price of their products by USD 0.1 per chicken, making a 1,000-gram chicken cost around USD 4 instead of around USD 3.8. The high cost of production is cited as one of the main justifications for the decision to raise prices, along with the rise in fuel costs following Saudi Aramco's decision to increase the price of diesel by 21%, making a liter cost around USD 16.7 as opposed to USD 13.80.
- An increase in the demand for low-cost protein sources like poultry meat, along with increases in population and per capita consumption, are key drivers for the rise in prices and production. The government's Vision 2030 aims to achieve 80% self-sufficiency in the poultry sector by providing subsidies for animal feed, interest-free loans, rebates on the purchase of specific poultry equipment, protection against imports of low-priced finished goods from neighboring countries, breeding farms, hatcheries, grow-out farms, and processing facilities. These localized factors are expected to help maintain prices sustainably and achieve self-sufficiency.
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