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Poultry has been traded globally for years. Each individual country can not possibly produce everything it needs, making this trade a necessity. Of course, that does not mean that there hasn't been any problems. There are several past examples of poultry trade gone wrong, but as a result standards are higher, making trading less of a risk.
In 2004, China and the United States had a major rift in their chicken trades and there has been tension ever since. The initial problems were a result of the bird flu outbreaks. Following that, both countries temporarily banned the trade of poultry from one another. Soon after, China lifted their ban, but it was another two years before the U.S. followed suit. Around the same time, Thailand chicken exports were suffering because several countries refused to buy their chicken because of past outbreaks, even after the products have been inspected and deemed safe. It seems that there will always be tension over poultry trade.
Over the past few years Chinese and U.S. poultry trade have not encountered many issues, but China recently threatened to stop buying American chicken. This has American suppliers nervous that they might lose major business. On top of this, domestic chicken sales are down because of the tough economic times, which places even more pressure on companies to export. Meanwhile, other countries' poultry sales are on the rise. For example, Brazilian chicken exports are up 25% since last October. Global competition is always increasing making even small markets impossible to lose.
While China is only about 2% of American chicken exports, it is a huge part of their success. Chicken exports to China are some of the most profitable. The Chinese enjoy the chicken feet and wings that are not worth much in the U.S., so they are sold at a huge profit margin. Some U.S. exporters go as far to say that if China were to cut off trade, it could lead to possible bankruptcy.
American companies are hopeful that this threat from China will be nothing more than empty words. Unfortunately, it does raise fears that chicken exporters will have to lower their prices in order to keep this market cornered. For now, trades are continuing as usual, but in this game of ‘chicken’, it is the Chinese who hold the power.
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