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