The GCC imports almost $2.8 billion of poultry meat annually to satisfy local demand. However, traditional exporters to the region are coming under increasing pressure from rising consumer expectations, expanded local production capacity and new entrants into the market.
In the period between 2008 and 2012, the proportion of poultry imported to the Gulf Cooperation Council (GCC) increased from 66 percent to 70 percent.
Total demand in the region is also increasing at a Compound Annual Growth Rate (CAGR) of 4 percent, increasing from 1.82 million tonnes in 2008, to 2.16 million tonnes in 2012. In Saudi Arabia – by far the largest market in the GCC – consumption grew at a CAGR of 6 percent over that period.
Chicken imported into the GCC is almost invariably in frozen form, comprised of 70 percent whole chickens and 30 percent chicken cuts. Although GCC producers find it difficult to compete in the frozen poultry sector, they are in a stronger position in the fresh and chilled poultry market.
Saudi Arabia has taken significant steps to develop local poultry production capacity to boost the country’s food security.
Local production in the Kingdom is forecast to grow by as much as 50 percent over the next decade. This expansion is expected to come as a result of major investments by the most significant participants in the market – Al Watania Poultry, Al-Fakieh and Almarai.
Almost three-quarter of GCC poultry imports come from Brazil, followed by France and the USA – with 12 percent and nine percent respectively – with the balance made up by countries such as Thailand, Uruguay,Malaysia and Argentina.
Figure 1: Import volumes of poultry to the GCC from 2008 – 2013
Turkey is an emerging force in this market and is increasingly targeting its exports towards the GCC.
Its exports of – mostly whole – chicken has increased at a CAGR of more than 50 percent in the period between 2008 and 2013 and Turkish exports are expected to account for almost 5 percent of global trade in 2014. Saudi Arabia recently lifted a ban on Turkish poultry imports, reflecting the fact that these products meet halal requirements, are of high quality and are available at a relatively low cost. Although Turkey is building from a small base, its share of the GCC market is expected to grow significantly over the coming years.
With a strong preference for fresh chicken underpinning local production, traditional importers also face the challenge of increasing consumer preferences for chicken pieces and a variied offering of value added products. Also, with supermarkets gaining market share over traditional outlets, branding is becoming more important in this high growth, but very competitive sector.