As the EU prepares to lift its import ban on fresh Thai chicken, poultry from Thailand could become a growing favourite with retailers looking to offer cheap meat to cash-strapped shoppers.

Thailand is one of the world’s largest exporters of chicken meat, but has been banned from exporting uncooked chicken to the EU since 2004, following a bird flu outbreak.

However, this ban will end in July, leaving the door open for about 50,000 tonnes of fresh Thai chicken to come to the EU. This would be in addition to the 200,000 tonnes a year of cooked chicken Thailand already sells into the EU, which primarily go into ready meals and the foodservice sector.

Commodity risers and fallers 12 May 2012

Feed wheat has been on a downward trajectory and, at £153.8/t, prices are 26% lower than this time last year and down 12.8% month-on-month.

Prices have fallen because the three-month delivery date on futures contracts is now after the northern harvests, when supply is set to be plentiful, but also because of concerns about the impact of the recent rain and cold weather. If a lot of wheat can’t be used for milling and has to be downgraded to feed, feed supplies could be boosted, further depressing prices. Milling wheat prices have already risen in anticipation of weather problems, however, with French prices up 5.4% and UK prices up 3.7% over the past month, although both remain down year-on-year.

Fresh chicken from Thailand would be well placed to become a cheaper alternative to UK and EU chicken. Stricter sanitary measures in Thailand have led to lower incidences of disease, and prices are low, driven down by efficient production techniques and reduced demand following the avian bird flu scare. At about £630/tonne, fresh chicken produced in Thailand is 28% cheaper than chicken from the UK and 18% cheaper than birds from the EU.

Demand for poultry meat is still growing in Europe, but EU production has started to stagnate - the 27 member states are forecast to produce 9.6 million tonnes of poultry in 2012, the same as in 2011. This has started to push EU poultry prices up and created an opportunity for Thailand to offer cheaper meats as well as replacing imports from countries such as Brazil, which are increasingly focusing on the Middle East.

Meat imports from across the world rarely make for positive headlines, as buyers of Brazilian or Thai poultry can attest. But a lot of cost-conscious shoppers won’t care a hoot.