06 Jul 2026

Asia’s poultry sector faces growth and oversupply risks

Southeast Asia’s poultry industry expands rapidly, yet economic pressures and global trade disruptions are reshaping supply and profitability.

aviNews Asia

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The global poultry industry continues to expand rapidly, with Asia at the center of this growth. Production in China surged 9% year-on-year in Q1 2026, while Southeast Asian markets such as the Philippines, Indonesia, and Thailand also reported growth above 5%. This expansion reflects chicken’s favorable price position compared to beef, which remains costly in many markets.

According to Rabobank’s Poultry Quarterly Q3 2026 report, strong supply growth is beginning to outpace demand. Weaker economic conditions and rising inflation are weighing on consumption, particularly in lower-income markets. In Indonesia and Malaysia, oversupply has already led to margin pressure as consumer demand softens. This imbalance highlights the need for disciplined production strategies across the region.

Southeast Asia balances expansion with market volatility

The Philippines remains one of the best-performing poultry industries in terms of margins, alongside South Africa and India. Strong domestic demand and competitive pricing have supported profitability. Thailand, meanwhile, continues to lead in cooked chicken exports, though raw chicken shipments to China declined following the expiration of export licenses.

Japan’s poultry sector illustrates the challenges of balancing growth with economic headwinds. Rising chicken prices have not deterred demand, but weaker tourism and consumer spending have softened the domestic market. Imports are expected to recover in Q2 and Q3, yet margins remain thin.

China’s role is shifting dramatically. Once the world’s largest chicken importer, it has become a net exporter, reshaping trade flows across Asia. Exports surged more than 50% in Q1 2026, while imports are rebounding from low levels. This transition underscores China’s growing influence in regional poultry markets.

Global trade shifts reshape Asia’s poultry outlook

Global chicken trade reached a record 3.8 million tons in Q1 2026, with Brazil and China as clear winners. Brazilian exports rose 5.5% year-on-year, while Chinese exports surged by more than 50%. Import growth was strongest in the Philippines, China, South Korea, and several African markets.

Trade flows into the Middle East remained resilient despite disruptions linked to the Iran conflict. Turkey and Iraq acted as transit hubs, while Saudi Arabia and Oman increased imports and re-exported volumes. These dynamics matter for Asia, as regional producers rely on stable Gulf demand to balance supply.

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Potential disruptions loom. The EU is considering removing Brazilian poultry imports due to non-compliance with its One Health antibiotics policy. If implemented, this would push EU prices higher and redirect Brazilian volumes toward Asia and other markets. Thailand and China are well positioned to benefit, increasing exports to the EU while strengthening their regional trade roles.

Disease and feed risks add further uncertainty

Beyond trade, Asia faces elevated disease risks. Avian influenza continues to circulate in live bird markets and backyard systems, while Newcastle disease has reemerged in Europe. The Southern Hemisphere winter raises the likelihood of new outbreaks in Latin America, southern Africa, and parts of Asia.

Feed markets also remain volatile. Geopolitical disruptions around the Strait of Hormuz are keeping energy and fertilizer prices elevated, raising production costs. A potential El Niño event could further tighten grain supplies in South Asia and Oceania, adding pressure to poultry producers.

Discipline needed to sustain growth

Asia’s poultry industry is expanding rapidly, but oversupply and economic pressures are testing resilience. Strong exports from China and Thailand, combined with robust margins in the Philippines, show the region’s competitive strength. Yet volatility in feed costs, disease risks, and shifting trade rules demand greater supply discipline.

Producers across Southeast Asia must balance growth with operational excellence. With consumers becoming more price-sensitive and global trade flows in flux, maintaining profitability will depend on restrained expansion and careful risk management.

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