Nationwide AI "Ahead of Year-End Peak, Egg and Chicken Crisis Looms... On High Alert"

No Current Impact on Supply and Prices, Adjusted with Reserves... Long-Term Prolonged Situation Inevitable Disruptions
Korean Poultry Association "If Infection Spreads Until March Next Year, Egg and Chicken Supply Shortage Will Cause Price Surge"

[Image source=Yonhap News]

[Asia Economy Reporter Lee Seon-ae] The chicken and bakery industries are monitoring the situation closely, although they do not expect a severe supply disruption or price surge like the past outbreak of highly pathogenic avian influenza (AI).

On the 11th, a representative from Harim stated, "We are strengthening quarantine measures and observing the situation. There is currently no impact on supply or prices, but if the issue prolongs, disruptions are inevitable. However, we believe it will not escalate into a serious crisis."

The chicken industry, anticipating the year-end peak season, shows visible signs of concern. A franchisee of an A chicken franchise said, "Chicken consumption increased somewhat due to remote work and classes caused by the COVID-19 pandemic, but recently, orders have dropped by about 5% compared to the previous day and week. Although we do not expect a major crisis like before, it is true that chicken orders decrease whenever AI occurs, so we are worried ahead of the year-end peak season."

A franchisee of a B chicken franchise also emphasized, "After the AI outbreak in 2016, sales plummeted by up to 50%, and we experienced a bleak period, so we cannot help but be on high alert. With COVID-19, in-store dining is hardly expected, and relying on delivery makes us increasingly anxious." He added, "However, there are currently no supply disruptions, and raw material purchase prices have not risen."

According to the 'Chicken Specialty Store Avian Influenza Damage Survey' conducted by the Korea Foodservice Industry Research Institute four months after the avian influenza outbreak in November 2016, 86% of all chicken specialty stores experienced sales declines due to avian influenza, with an average sales decrease rate of 29.7%. Nationwide, the purchase price of raw material live chickens also rose by about 12.6%.

A representative from the A chicken franchise headquarters said, "We have been able to respond stably to supply and demand by using stockpiled supplies during AI outbreaks, and prices have remained stable. Currently, there is no disruption in supply due to stockpiled supplies, but if movement restrictions in AI outbreak areas prolong, securing broiler supplies will inevitably face difficulties." A representative from the B chicken franchise headquarters also said, "There is no impact yet, but we are monitoring the situation closely. However, we do not expect it to reach the scale of past crises like in 2016."

The bakery industry, which expects a special demand for cakes at year-end, appears even more anxious. The Christmas season is a period when about 10% of annual cake sales are concentrated due to year-end parties and events, and eggs, one of the main raw materials, are used the most, making supply crucial. Eggs cannot be frozen, so pre-stockpiling is not possible, making the industry vulnerable to AI's direct impact. A representative from SPC Group, which owns the largest bakery brand Paris Baguette nationwide, explained, "Currently, AI-affected farms are unrelated to contracted farms, so there is no immediate significant impact, but we are monitoring the spread."

The Korea Poultry Association expressed concern, saying, "It is still the early stage, so there is no impact on supply or prices yet, but if the infection spreads until March next year, egg and chicken consumption may decrease, causing prices to fall initially, then surge sharply due to shortages."

This content was produced with the assistance of AI translation services.