Present Situation and Future Prospect of Chicken Meat Production and Consumption in Asia -A Study of Selected Nine Countries

Present Situation and Future Prospect of Chicken Meat Production and Consumption in Asia -A Study of Selected Nine Countries Arunasiri IDDAMALGODA, Michio SUGIYAMA, Katsuyuki OGURI, Katsumi ARAHATA and Satoshi KAI 1 The United Graduate School of Agricultural Sciences, Gifu University, 1-1 Yanagido, Gifu 501-11, Japan 1 Department of Agricultural Economics, Faculty of Agriculture, Kyushu University, Hakozaki, Fukuoka, Japan This paper reports the results of survey on chicken meat production and marketing in selected Asian countries representing developing (India, Bangladesh, Pakistan), rapid developing (Thailand, Philippine, Iran), and developed nations (Japan, Taiwan, Rep. of Korea) in the region. This survey was done during 1994-1995, coordinated with Asian Productivity Organization (APO). Subsequently the meat production and marketing symposium was held in Tokyo which was attended by those foreign experts participated during the survey. The survey covered all the aspects of poultry industry which included chicken, ducks, geese and quails. The survey data obtained from 1970 to 1993 concerning poultry industry was used. The primary objective is to describe poultry consumption and production patterns. The outlook for the poultry industry is promising. In the past 20 years consumption of chicken meat has increased dramatically in these nations. Consumption of chicken meat will continue to increase as estimated income elasticities for chicken meat indicate a latent demand for this meat comparative to other types of meats. In the coming years this increase will continue, although at a slower pace. In the less developed countries in the region, consumption and production will increase quicker than developed countries. However, our previous study on meat consumption patterns indicated that the consumption of meat is influenced by taste and preference as well as the level of income. With the increase in household income level, income elasticities of demand for chicken meat has increased and it is highest in Pakistan (1.639) followed by India (0.881) and Taiwan (0.4780). Chicken are native to the monsoonal rice growing areas of Asia and so they have become a suitable alternative to fish which has been their main traditional source of protein. However, the preference of animal protein has been shifting from fish to chicken meat. Chicken is very efficient and economically the best as far as the feed conversion ratio is concerned. Another factor which affects meat consumption is the cultural and religious factor. Certain religions has restriction on consumption of certain meat types but none for chicken meat. Therefore, chicken meat can be called as "Universal Meat". (Jpn. Poult. Sci., 35:9-18, 1998) Key words: income elasticity, latent demand, protein ladder, universal meat Introduction During the past 3 decades, in many Asian countries the poultry industry has made Received June 13, 1997 Accepted July 22, 1997

10 Jpn. Poult. Sci., 35 (1) spectacular progress transforming itself from a backyard industry into a dynamic and sophisticated agribased industry. During these years industry has grown in size, quality and productivity. Although Asian countries have kept the grain core dietary pattern for a long time, economic growth in recent years has gradually changed to meat increasing in the dietary pattern. But in the west, demand for red meats started a long term decline because of increasing consumer concern about fat and cholesterol (PURCEL,1993). In the Asian region, the outlook for the poultry industry is promising. The consumption of poultry meat has increased dramatically. In the past 30 years per capita consumption of poultry meat has increased by over 100 percent in surveyed countries. Several factors contributed to this trend and the first and foremost is increasing consumer preference for poultry meat among all communities and religions in the region. Certain biological factors, such as lower feed consumption per kg of meat produced, give poultry a distinct price advantage over other types of meat. Among Asian nations there are meat exporting nations and also meat importing nations. On the other hand, if foreign meat imports are radically increased to cope with the increase in demand, the domestic livestock and poultry industries would face a lot of difficulties. It is noteworthy that chicken meat production in Asia has been expanded rapidly during past decade. However, studies on present situation and future of the industry are quiet few in this region as compare to U.S or Europe. Therefore, the purpose of this study is to consider the present situation of poultry meat supply and demand; to estimate the income elasticity of demand and production and consumption by the year 2000. Method of Study A comprehensive survey questionnaire was prepared and mailed to eighteen Asian countries. The collected data was used to compile a detailed report. For this study the livestock meat consumption and marketing symposium was held in Tokyo which was sponsored by APO and conducted by the authors. The data from 9 selected countries concerning the poultry industry was used for this study. The experts, mentioned under the references, attended the meeting and discussed the data and industry situation of their respective countries. The term "Poultry Meat" included main species like chickens, turkeys, ducks and quails but over 80% is chicken meat. Therefore, the term poultry meat is mentioned in those places concerning whole poultry farming. Regression analysis was performed on the data for meat consumption, production against per capita GNP (Gross National Product). Regression analysis was used to estimate the income elasticity of demand and to forecast supply and demand for the poultry meat in the surveyed countries. Results and Discussion 1) Trend in Poultry Population Judging from poultry population and meat share of the world output, there seems to be good potential to improve the production efficiency. According to

IDDAMALGODA et al.: Chicken Meat in Asia 11 Fig. 1. Change in total chicken population Fig. 2. Distribution of chicken population in 1993 ALEXANDRATOS (1995) study there was 4727 million birds in the Asian region which is 42.7% of the world share. But the production was just 16% of the world share, so there is good potential to improve production through the existing poultry population through the adaption of new genetic and breeding improvements. In the studied countries, chicken population has increased dramatically and among them Pakistan and Iran have shown the highest growth as presented in Fig, 1. The expansion of the commercial poultry production does not mean the decreased importance of rural poultry. It is still a main source of poultry meat and eggs for the rural inhabitants which occupy over 50% in all the developing Asian countries. Growth of the broiler population is characteristic in these nations. Fig. 2 shows the distribution of chicken population in the studied countries. 2) Trend in Chicken Meat Consumption Among the surveyed countries, the highest chicken meat consuming country during 1993 was Taiwan (25.5kg) followed by Japan (13.9kg) and Thailand (11.2kg). India (0.44kg) and Bangladesh (0.69kg) were the lowest consumers (Table 1). Roughly 70% of poultry meat comes from broiler and the other 30% is culled chicken, turkey and duck meat. Though some countries show rapid increase in consumption it will be

12 Jpn. Poult. Sci., 35 (1) Table 1. Annual per capita consumption of chicken (Unit: kg/year) Data: Survey on Meat Production and Marketing in Asia, 1995, APO*. Fig. 3. Poultry meat and egg consumption in Asia at a slower pace than the past decade. Due to the rapid development of the poultry industry in the Asian region, especially the broiler industry, the intake of poultry meat is increasing substantially in all the surveyed countries. Fig. 3 represents the per capita consumption of poultry products in Asian countries. This indicates there is an equal growth rate in consuming eggs and meat in the region. However, Table 2. indicates total weight of meat consumption and its share by different meat types in the year 1993. According to the percentages, East Asian nations takes more pork as a choice of meat while the other nations prefer either beef or sheep and goat meat. But the overall trend is towards chicken meat in all the surveyed countries. Chicken meat is accepted by all communities in the region where as pork is not consumed by Muslims and beef by the Hindus. So, chicken meat is consumed as "Universal Meat" for most countries. Research done in multi ethnic and multi religious country like Malaysia also explained the overall consumption trend towards chicken meat (ISHIDA, K. 1996). The majority of Malays are Muslims and do not eat pork and the majority of Indians who are Hindus do not eat beef but Chinese consume all types of meat. Figure 4 indicates the percentages of different types of meat consumed by the

IDDAMALGODA et al.: Chicken Meat in Asia 13 Table 2. Total weight of meat consumption, it's share by meat in 1993 (Unit:kg&%/year) *No pork production in these Islamic nations Data: Survey on Meat Production and Marketing in Asia, 1995, APO. Fig. 4. Meat consumption in Malaysia by ethnic group and kind of meat Source: FAMA, Laporan Kaijan FAMA, 1988 main ethnic communities in Malaysia. This survey revealed that Chinese have been changing to poultry as an alternative protein source due to the already high level of pork consumption in their diet. At present, the Malaysian government is controlling the expansion of the pig raising industry not merely to conserve the environment but also to reduce the antipathy to pork eating among Malays. 3) Trend in Chicken Meat Production According to the latest FAO projections, meat production in South Asia for cattle & buffalo, sheep & goat, pig and poultry was 1.8, 0.5, 0.2, 0.2 million tonnes (1970) respectively. This has increased to 3.4, 1.4, 0.4 and 0.6 million tonnes (1990) and is expected to increased up to 4.5, 2.3, 0.6 and 2.0 million tonnes by the year 2010 with the annual growth rates of 2.6%, 3.5%, 2.6% and 6.4% respectively. This indicates the dominance of the poultry industry and much contribution comes from countries such as India and Pakistan. Meat production in East Asia for cattle & buffalo, sheep & goat, pig and poultry was 0.9, 0.3, 7.3 and 1.6 million tonnes (1970) then it has increased to 3.6, 1.3, 29.5, 7.1 million tonnes respectively. Meat production is expected to increase about

14 Jpn. Poult. Sci., 35 (1) Table 3. Total weight of dressed carcasses of chicken (Unit: 1000mt.) Data: Survey on Meat Production and Marketing in Asia, 1995, APO*. 6.4, 2.0, 57.2, 17.3 million tonnes by the year 2010. In 1995, Asia as a whole produced 13.8 million tons of chicken meat and out of that China produced about 6.8 million tons which is almost half of the total. Hong Kong (200,000tons) is the major exporter of the region (mainly as a transit point to China) followed by China (174,000tons) and Thailand (153,000t). China is also a major importing country in Asia (133,000t) after Japan (444,000t) and Hong Kong (468,00t). This indicates the China's importance in the poultry industry in Asia. But for this study China has been excluded because China is not a member of Asian Productivity Organization (APO). In the surveyed countries poultry meat production has also shown fast growth as presented in Table 3. Thailand, Taiwan, Philippines, India and Pakistan showed rapid growth from 1970 to 1993 but in the case of Japan there is a slight decline of production with the increase of imports. Feed utilization is of special importance in world livestock production because the efficiency with which chicken, as well as other species of livestock, convert feed into animal products. In this protein ladder, the lowest place is taken by cattle which take an average 8 kilograms of feed to produce 1 kilogram of meat. Next comes pig which requires an average 4 kilograms to produce one kilogram of meat. Top of this ladder is chicken which need only 2 kilograms for a kilogram of meat produced. Therefore, in the future most of the animal protein will come from the best economically users of feed in the protein ladder. 4) Estimates of Income Elasticities of Demand for Chicken Meat Meat consumption has been growing with the increase of income in Asian countries. Since the income level has been rising, it is important that we estimate income elasticities of demand for meat to stabilize the future supply and demand. The followings are the estimated functions for chicken meat in surveyed countries. India Log(Y)=-0.0377+0.8810 Log(GNP) (3.19) R2=0.718 Pakistan Log(Y)=0.7881+1.6390 Log(GNP) (4.07) R2=0.805 Bangladesh Log(Y)=-0.0455+0.1377 Log(GNP)

IDDAMALGODA et al.: Chicken Meat in Asia 15 Table 4. Estimated per capita production and consumption of poultry meat in the year 2000 Estimated regression model is; Y=a+blog(time) Where Y=Per capita production or consumption of meat Time=The Christian Era Data: Survey on Meat Production and Marketing in Asia, 1995, APO. (0.69) R2=0.1387 Thailand Log(Y)=0.4151+0.0256 Log(GNP) (0.52) R2=0.063 Philippines Log(Y)=0.6686+0.1966 Log(GNP) (1.58) R2=0.387 Taiwan Log(Y)=0.9446+0.4780 Log(GNP) (9.22) R2=0.965 Rep. of Korea Log(Y)=0.3402+0.4314 Log(GNP) (10.9) R2=0.967 Japan Log (Y)=0.4814+0.3900 Log(GNP) (9.49) R2=0.9575 Iran Log(Y)=0.4796+0.3842 Log(GNP) Model: log(y)=a+blog(x) (2.78) R2=0.7209 Where Y is per capita consumption of chicken meat and X is per capita GNP. Figures within the parentheses denote t values. R2 is a determination coefficient. When the income elasticity of the meat is high, it means that consumption increases with an increase in income. This effect is greater for low income countries. Thus consumption slightly increased in many South East and South Asian countries where annual GNP growth is about 8-9% at present. For example, income elasticity of demand in India: 0.881, Pakistan: 1.639, Philippines: 0.1966 and Taiwan: 0.478. Accordingly, we can say that as income increases by 10%, the demand for chicken meat increases by 8.8%, 16%, 1.9%, 4.78% respectively. Since we can measure the strong latent demand for chicken meat in these countries, it is important to consider how we supply meat sufficiently with income growth in the

16 Jpn. Poult. Sci., 35 (1) future. 5) Estimates of production and consumption in the year 2000 In order to clarify the meat supply and demand situation in surveyed countries, per capita production and consumption of meat were estimated by using time trends which are shown in Table 4. Judging from this table, it can be estimated that per capita consumption of poultry meat will surpass its production in some countries if the production growth rate continues to be the same as present or any decline from the current growth rate. Among the surveyed countries some have the potential to increase production from the presently available resources and avoid possible imports by the year 2000. Generally speaking, the industrialized Asian nations, meat import will increase with increasing demand. 6) Conclusion 1. With rapid economic growth, along with other meat types, the consumption of poultry meat has increased dramatically. This increase will continue in the coming years but at a slower pace. In less developed countries, consumption and production will increase quicker than in developed and newly industrialized nations in the region. Culture, religious belief, taste and preferences of the inhabitants and educational factors also affect the type of meat consumed. 2. Judging from the trend of poultry population, meat output, the growth of the GDP and the changes in the meat increasing dietary pattern, there seems to be substantial room to make fuller use of poultry potential in the Asian countries. Especially the outlook for the poultry industry is promising. 3. Increasing consumer preference for poultry among all communities and religions in the region, improvement in the feed conversion ratio per kg of meat produced, give poultry a distinct advantage over the other types of meat. 4. There is strong latent demand for chicken meat in the studied countries and if the production cannot improve with the growing demand, then some of these countries will have to depend on imports. The potential to supply chicken meat is relatively strong compared to other meat types. 5. In order to develop a stable poultry industry in the respective countries, it is necessary to consider the present and future situation of the industry and to support it financially and through other means by each country's government. Acknowledgment We are grateful to the Asian Productivity Organization for organizing this survey which enable to conduct this study. References ALEXANDRATOS, N (1995) World Agriculture Towards 2010: FAQ Study, pp. 73-100 FAQ Publication. CAPPS, Q., S. M. DANIEL, and E. B ROBERT, (1988). "Consumer Characteristics Associated with the Selection of Lean meat Products". Agribusiness: An International Journal, 4: 549-57. CHONGWATANKUL, P. (1995) Meat Production and Marketing in Thailand. Country Report. Dept. of

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