Iraq domestic poultry production in 2011 is expected to decline from 2010 levels, as reduced feed availability, poultry disease issues, and poor profitability have reduced domestic production prospects. The outlook for U.S. poultry exports to Iraq during 2011 had been on track to approach or exceed the record level achieved in 2009
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GAIN Report Number:
Poultry and Products Annual
Poultry and Products Annual
David G. Salmon
Iraq domestic poultry production in 2011 is expected to decline from 2010 levels, as reduced feed
availability, poultry disease issues, and poor profitability have reduced domestic production prospects.
The outlook for U.S. poultry exports to Iraq during 2011 had been on track to approach or exceed the
record level achieved in 2009; however, the imposition by Iraq of a new import precertification
requirement in July has sharply diminished U.S. exports prospects. For 2011, U.S. poultry exports to
Iraq are forecast at 100,000 metric tons, down 21 percent from the 2010 level. Total poultry
consumption is expected to decline, as both domestic production and imports will be below year-earlier
levels and retail prices have increased, due to trade concerns about precertification and reduced supplies.
Prospects for renewed growth in the Iraqi poultry sector remain generally positive. Imports should
recover, assuming problems with precertification can be overcome. However, it is unlikely that domestic
production will expand rapidly in the face of continued high feed prices and ongoing disease problems.
Poultry, Meat, Broiler
Iraqi poultry production in 2011 is expected to decline six percent from the 2010 production level.
Growth in the poultry sector was curtailed during the last half of 2010 by high feed prices and disease
problems, both of which have carried over into 2011. Poultry growers across central and southern areas
have reported very high mortality rates and weak to negative returns since the fall 2010 production
cycle. Hopefully, disease problems and associated losses represent a short-term set back, as producers
move up the learning curve for intensive poultry operations. Production in 2011 is forecast to decline
modestly based upon the reasons described above. Only modest expansion of domestic poultry
production is anticipated during 2012. Disease problems that have been particularly severe across central
and southern areas of Iraq continue to affect domestic production negatively. Bio-security and bio-safety
protocols are not strictly adhered to by most producers, which makes it difficult to separate out disease
problems from poor overall care and management by poultry producers.
Domestic feed availability declined during 2011, as lower domestic feed wheat supplies and lower
barley production limited supplies. While 2011 corn production will likely be above the 175,000 metric
tons produced in 2010, it will not make up the shortfall of the other grains. Corn production in 2011 is
forecast at 200,000 metric tons. Quality problems are pervasive in domestic corn; corn is harvested and
shucked by hand, and then sold/delivered to Mesopotamia State Company for Seeds, part of the Iraqi
Ministry of Agriculture, where it is shelled. Lack of shelling, storage, and drying capacity leads to
mold/fungi development and potential aflatoxin issues. Larger, integrated poultry operations have
indicated that past experience with Iraqi corn was problematic, and that they no longer use it despite its
clear price advantage over imported corn.
Protein meal continues to be a major constraint, as Iraq produces only very limited quantities of oilseed
crops. Sunflower and sesame production is strictly for confectionary and food uses, cotton production
has rebounded in recent years; however Iraq has no operational cottonseed processing facilities.
Cottonseed is utilized whole, for domestic livestock feeding, and is also exported.
Imports of feed for the poultry sector remain constrained by cumbersome import requirements and
seasonal import bans. Importers report that they are very reluctant to ship feed products to Iraq from
neighboring countries, due to the potential for costly border delays and corruption issues. End users have
also seen sharply higher import procurement costs over the last 12 months as international prices rose
sharply during mid-summer 2010. Imported feed costs within Iraq remain well above what might be
expected assuming efficient market transactions, as traders/importers deal in relatively small quantities
and rarely use bulk shipment. Corn, soybean meal, and pelleted feed are generally shipped to Iraq in 50
kilogram bags. It is likely that U.S. corn sold bulk to customers in Syria is being resold within Iraq.
The Ministry of Agriculture announced in the spring of 2010 that a poultry initiative was under
consideration. The proposal/plan would entail the purchase of corn and soybean meal by the Ministry of
Agriculture. The Ministry would then resell the imported feed products at subsidized prices,
approximately 25 percent under their procurement and handling cost. This initiative has been in the
formative stage for over a year, and internal debates within the Ministry of Agriculture over which
?State Company? will be responsible to import and administer the program have apparently been largely
resolved. This initiative has the potential to impact corn and soybean meal imports substantially, as the
funding level is reportedly $45 million dollars. The program has been designed to function as revolving
fund, with an annual supplemental requirement to compensate for the 25 percent subsidy.
Ministry officials report that under the poultry initiative they will purchase 100,000 metric tons of
poultry feed annually, with the initial purchase to be 25,000 metric tons of corn. This is to be followed
by a purchase of second purchase that will include soybean meal. There is a downside to this initiative,
since nascent private feed sector imports could be squeezed out, as importers would be unable to
competing with subsidized imports. It may also be the case that the easing of feed import requirements
and testing regimes could be further postponed by the entry of the Ministry of Agriculture as a feed
Senior Ministry of Agriculture officials have indicated that they will not import U.S. corn, due to
restrictions on imports of genetically modified organisms. It remains unclear if this restriction would
also apply to products, such as U.S. soybean meal. Realistically, the Ministry of Agriculture needs to
understand better that lower cost imported feed products, along with better producer practices, is the
avenue for growing the domestic poultry industry. Increased output produced at more competitive
prices will create both additional economic activity and jobs in the still struggling agricultural sector.
Feed Supplies: (TMT)
2007/08 2008/09 2009/10 2010/11 2011/12
Domestic 900 500 550 450 250
Imported 25 15
Wheat Bran 950 910 920 900 950
Domestic 900 600 435 900 850
Imported 50 35 35 35
Domestic 290 200 150 175 200
Imported 25 80 80 100 90
Other Feed (Imported)
Pellets 25 60 90 80
Soymeal 50 75 100 145 140
Other 2 3 5 5 5
Total: 3,117 2,468 2,350 2,800 2,600
Source: FAS, Post Estimates
With both a drop in domestic production and imported supplies during 2011, per capita consumption
dropped for the second consecutive year. With expected population increases, maintaining per capita
consumption levels at the 2010 level will require an annual increase in poultry supplies of approximately
13,000 metric tons. Continued economic growth across Iraq should lead to gains in personal income,
supporting poultry meat purchases by consumers. The outlook for continued high consumer prices in the
red meat sector adds to a generally favorable outlook for both poultry production and imports.
In 2011, the decline in domestic poultry production/supply is being aggravated by new import
regulations (see the Policy section below). Iraq instituted a precertification requirement on nearly all
imported products on July 1, 2011. Imports of frozen poultry were particularly hard hit by problems with
implementing this requirement. This has been reflected in sharply higher market prices for imported
poultry products. Retail prices in Baghdad have risen 45 percent since early July. While some of this is
associated with the seasonal drop in domestic production, higher prices could encourage producers to
expand production in the short term, if precertification enforcement continues to restrict poultry imports.
Although complicated by the precertification requirement, imports of broiler meat should continue, due
to its relative affordability relative to red meat prices and government concerns about food price
On July 1, 2011, the Central Organization for Standardization and Quality Control (COSQC) of the
Ministry of Planning implemented a new precertification requirement for most imported products,
including processed food. The intent of this new requirement was to bring imports of substandard and
unsafe products under control. Under this new requirement, COSQC contracted with two private sector
companies, SGS and Bureau Veritas, to inspect and certify, in the country of origin prior to shipment,
that products meet Iraqi import requirements. Products arriving at Iraqi ports of entry must now have a
certificate of conformity issued by one of these two companies to enter the country.
Implementation of the new requirement resulted in turmoil at ports of entry in Iraq and badly disrupted
imports of many products, including frozen poultry from the United States. Because of the turmoil after
the July 1st implementation, the Prime Minister?s office declared suspension until July 16th, which
helped calm the situation temporarily. In mid-August, the Iraqi Parliament stepped in to suspended
precertification for a two-week period until September 1. However, precertification is now back in
effect, and further suspensions seem less likely.
Precertification has still not been implemented in the Kurdish autonomous region in northern Iraq.
However, COSQC in the Ministry of Planning in the Kurdish Regional Government has indicated that
they will be moving forward soon to implement it there.
Production, Supply and Demand Data Statistics:
Poultry: Production, Supply and Demand Data Statistics
Year Country Production Imports from Total Domestic Ending
US Imports Consumption Stocks
2010 Iraq 160 126 308 468 0
2011 Iraq 150 100 280 430 0
2012 Iraq 160 120 290 450 0
Source: FAS, Post Estimates