ITALY: IMPACT OF AVIAN INFLUENZA ON POULTRY MARKET

UNCLAS ROME 004080

SIPDIS

DEPT OF AGRICULTURE FOR FAS/DLP, FAS/ITP, AND FAS/ICD

E.O. 12958: N/A
TAGS: ETRD EAGR TBIO IT USTR
SUBJECT: ITALY: IMPACT OF AVIAN INFLUENZA ON POULTRY MARKET

REF: STATE 216147


1. (U) This message responds to reftel regarding the impact
of avian influenza on the Italian poultry market. GOI
efforts to control avian flu and the GOI's ability to respond
to an influenza pandemic will be reported septel. Please
note that the United States does not export poultry meat to
the EU, including Italy, due to long-standing phytosanitary
trade barriers.


2. (U) Italy is bound by EU trade restrictions enacted to
prevent the spread of avian influenza (AI) into the European
market. The EU currently bans poultry products from
Cambodia, China (including Hong Kong),Indonesia, Laos,
Malaysia, Mongolia, North Korea, Pakistan, Romania, Russia,
Thailand, Turkey, and Vietnam. The EU has not decided when
these bans will be lifted.


3. (U) Italy's next steps in formulating its poultry import
policy will follow EU-level meetings. AI was discussed at
the December 8 meeting of the EU Standing Committee of the
Food Chain and Animal Health and the December 12 meeting of
the European Chief Veterinary Officers. Italy's Ministry of
Health, Department of Animal Health, will participate in the
January 17-18 International Ministerial Pledging Conference
on Avian Influenza.


4. (U) Annual Italian poultry production is worth about two
billion euros at farm-gate prices (about five billion euros
at the consumer level),and accounts for roughly 4.5 percent
of Italian agricultural production. In 2004, the poultry
industry produced about 1.1 million tons of poultry. Of this,
70 percent was broiler chicken; 28 percent, turkey; and two
percent, miscellaneous minor species. The industry is
comprised of roughly 6,000 commercial poultry farms, 173
slaughter plants, and 517 packers/processors. The market for
imported poultry is small and limited to turkey meat and
price-competitive chicken from Brazil.


5. (U) The Ministry of Agriculture estimates the AI scare
resulted in a fifteen percent drop in demand for poultry meat
in September, with another 35 percent drop in October.
Overall, demand dropped six percent in the January - October
2005 period, compared to the same period in 2004. This drop
will mean a 36 million euros loss for Italy's poultry
industry this year. To reverse declining poultry demand, the
government launched a campaign to make consumers aware that
AI cannot be transmitted through the consumption of
adequately cooked poultry products.


6. (U) In November 2005, the farm gate price of chicken
meat was 0.50 euros/kilo, down 37.5 percent from last
November's price of 0.80 euros/kilo. Turkey meat experienced
a similar decline in price, sliding from one euro/kilo to
0.70 euros/kilo over the same period. While consumer prices
are also declining, they are doing so at a slower rate.
SPOGLI