Bird flu sparks financial losses in poultry sector

LONDON, May 24 (Reuters) World poultry prices have tumbled this year as fears about a lethal strain of bird flu reduced demand, sparking a crisis which threatens the future of some producers, industry leaders and analysts said.

''I have never seen such widespread (financial) losses around the world,'' said Gordon Butland, president of Global Poultry Strategies told World Poultry 2006, a conference organised by Agra Informa, an agricultural publishing group.

He did not provide any loss figures, but he said reduced demand caused by the spread of bird flu had ''collided'' with over-optimistic production forecasts from the world's two largest exporters, Brazil and the United States.

''In Brazil, there are going to be casualties (among poultry companies),'' Butland said yesterday.

He noted that Brazilian companies also were likely to adopt aggressive pricing policies as they attempt to generate cash flow to help to survive the crisis.

A deadly H5N1 strain of bird flu has killed more than 120 people since late 2003, most of them in Asia.

Human cases have been linked to direct or indirect contact with birds, rather than consumption of poultry, but demand still has fallen sharply in some countries.

''The cost of this non-objective crisis is huge...It will be difficult for some companies in the sector to rise above the crisis,'' said Guy Odri, general manager of French poultry company Doux Group Worldwide.

Odri said the industry's problems had made it difficult for European companies to make investments in mechanisation which will reduce labour costs.

''We know we have to invest in mechanisation and it is impossible to get the funding. The funding of the sector is a very big crisis,'' Odri said.

Trefor Campbell, managing director of Northern Ireland poultry producer Moy Park Ltd said the European industry could compete on a level playing field with mechanisation reducing any benefit competitors obtained from lower cost labour.

He said, however, that world trade talks were ''increasingly disruptive,'' adding that some rivals operated under different rules which placed his company in an unfair competitive position such as less stringent environmental legislation.

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