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China’s Poultry Feed Demand to Slump 20% on Bird-Flu Outbreak

April 18 (Bloomberg) -- Feed demand from China’s poultry industry may slump 20 percent in the second quarter from a year earlier after an outbreak of bird flu, research firm Shanghai JC Intelligence Co. said.

The H7N9 virus, which has killed at least 17 people in China since the beginning of March, has caused more than 16.7 billion ($2.7 billion) of losses to the nation’s poultry industry as consumers avoid chicken, the official Xinhua News Agency said April 16, citing the China Animal Husbandry Association. Poultry feed is mostly made of corn and soymeal.

Poultry-product sales have dropped almost 70 percent since the end of March as government asked its citizens to avoid contact with live animals, Shanghai JC said in a report dated yesterday. Farms are reducing flocks and selling off broilers, birds under 13 weeks old that constitute almost all commercial chicken production, according to the report.

“The industry has been dealt a blow so severe that it won’t be able to shake off the impact at least until late May or June,” Li Qiang, managing director at the Shanghai JC Intelligence Co., said by phone from Shanghai today.

An average Chinese urban resident gets 28 percent of annual protein from pork, 14 percent from poultry and 13 percent from eggs, according to analyst Alice Xuan of Shanghai JC. In rural areas the figures are 39 percent, 12 percent and 15 percent, respectively, Xuan’s analysis showed. About 51 percent of Chinese lived in cities as of 2011, statistics show.

Interest in raising poultry has “drastically declined,” the China National Grain & Oils Information Center said in an e-mailed report yesterday. Feed demand may decrease by 4.4 million tons, including 2 million tons of corn, if the outbreak lasts to May, while impact on June and after may be small, it said.

To contact Bloomberg News staff for this story: Feiwen Rong in Beijing at frong2@bloomberg.net

To contact the editor responsible for this story: Brett Miller at bmiller30@bloomberg.net

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