* Bird flu death toll stokes fears about waning demand
* Slaughterhouses slow purchases after Lunar New Year
* Chicken is cheap alternative to pork, China's favourite
(Updating to add more detail, comment)
BEIJING, Feb 15 Chinese chicken prices sank to
their lowest level in more than a decade on Wednesday as fears
grow about the spread of bird flu, hurting meat producers' share
prices and deepening concerns about demand in the world's
second-largest poultry consumer.
The sharp drop came as the government reported as many as 79
people died from H7N9 avian flu in January, four times higher
than the same month in past years and bringing the total death
toll to 100 people since October.
The larger-than-expected number alarmed the market, sending
prices in the main producing regions to their lowest since 2005,
according to Shanghai-based consultants JC Intelligence Co (JCI)
which assesses prices.
"Now it's relatively serious. The impact was
underestimated," said Alice Xuan, JCI analyst. "Lots of places
have closed down live poultry markets. That has quite a big
The spread of the deadly virus comes as neighbouring South
Korea and Japan also battle major outbreaks among their poultry
Live poultry markets are the main sales channel for China's
local chicken breed, which accounted for about a third of the
poultry meat supply last year, according to estimates from the
United States Department of Agriculture.
Over the past three months, many provinces have closed live
poultry markets to prevent the spread of infection, hitting
sales of birds, said Xuan.
The impact on local birds has dragged down the prices of
white feather chickens, bred from imported stock and used by
fast-food chains, that account for more than half the country's
The average price of live chickens in major producing areas
such as Shandong, Henan, Hebei, Gansu, Anhui, and the northeast
region fell to 5.28 yuan ($0.7690) per kilogram this week, down
from more than 7 yuan per kg in December.
The drop shows slaughterhouses have slowed their purchases
since returning to work after the Chinese Lunar New Year
holiday, said Pan Chenjun, senior analyst at Rabobank.
"The slaughterhouses will be very cautious at the moment,
they don't know how consumers will react to bird flu," she said.
The fallout from bird flu will add to concerns in the
industry, which is already battling a domestic surplus after
China ramped up output and imports rose just as the pace of
demand growth has slowed.
Chicken is a popular and cheap alternative to pork, the
country's best liked meat, but in recent years demand has been
hit by food safety scandals and bird flu outbreaks.
Shares in major poultry meat supplier Fujian Sunner
have fallen 12 percent so far this year to near
China's leading broiler breeder Yisheng Poultry
is down 21 percent, languishing not far off 14-month lows hit
The last major bird-flu outbreak in 2013 that ravaged the
domestic poultry industry caused more than $6 billion in losses
for the agricultural sector.
($1 = 6.8660 Chinese yuan renminbi)
(Reporting by Dominique Patton and Josephine Mason; Editing by
Richard Pullin and Christian Schmollinger)