Lower oil prices bring fresh hope for Asia’s poultry industry

Brent crude is now trading around USD 72–74 per barrel, its lowest level in nearly four months and roughly 30–40% below the highs reached during the recent conflict.

The correction reflects expectations of improved oil availability as exports from the Gulf recover and tanker traffic steadily increases.

Why it matters to poultry

For Asia’s poultry industry, the decline in oil prices is more than a positive headline. Lower fuel costs influence almost every stage of the poultry value chain—from importing feed ingredients and additives to operating feed mills, hatcheries, processing plants, refrigerated warehouses and transport fleets.

While poultry companies will not see immediate savings, the change creates a more favourable cost environment after months of uncertainty.

Benefits will come gradually

Unlike commodity markets, poultry production does not respond overnight. Many companies are still using inventories of fuel, feed additives and imported raw materials purchased when freight rates and energy prices were higher.

The first measurable savings are likely to appear within 1-2 months as new consignments of amino acids, vitamins, enzymes, minerals and other imported inputs arrive at lower shipping costs.

Over the following 2-3 months, reduced fuel and freight expenses should filter through to feed mills, hatcheries, farms, processors and cold-chain operators.

Lower freight, lower operating costs

Ocean freight is expected to soften as bunker fuel prices decline and shipping schedules become more predictable. This should reduce the landed cost of imported nutritional ingredients used extensively across Asia.

At the same time, lower diesel prices could ease the cost of transporting feed, day-old chicks, table eggs, live birds and processed poultry products.

Energy-intensive facilities are also positioned to benefit if lower crude prices are reflected in domestic fuel and electricity markets. Even modest reductions in these costs can improve operating margins for integrated poultry businesses.

Supply chains regain momentum

The significance of the Strait of Hormuz extends beyond oil. The waterway is a vital trade route linking Asian markets with suppliers in the Middle East and beyond.

As vessel movements normalize, delays in the movement of feed ingredients and agricultural commodities are expected to decline, improving supply chain reliability and inventory planning.

Regional impact

The impact is expected to be felt across Asia. China could benefit from lower import and energy costs, while Japan and South Korea may see relief because of their dependence on imported grain and fuel.

Poultry industries in Thailand, Indonesia, Vietnam, Malaysia, the Philippines and India are also likely to benefit from lower freight and logistics expenses, although the pace of savings will vary according to domestic fuel pricing policies and exchange rates.

The bigger cost challenge

Despite the positive outlook, lower oil prices alone will not transform poultry economics. Feed remains the industry’s largest expense, accounting for around 65–70% of production costs.

The availability and pricing of corn and soybean meal will therefore continue to have the greatest influence on profitability, alongside weather conditions, animal health challenges and consumer demand.

Looking ahead

If crude oil remains near current levels and stability in the Gulf is maintained, Asia’s poultry industry could begin experiencing measurable cost relief between late July and September 2026. The full benefit will emerge progressively as lower fuel, freight and logistics costs work their way through the supply chain.

After several years of volatile input costs and disrupted trade, the reopening of the Strait of Hormuz represents more than a geopolitical milestone. For poultry producers across Asia, it offers the prospect of a more stable operating environment and renewed confidence in regional supply chains.