North Asian chicken leg price hits nine-month high amid inventory concerns

North Asian chicken leg prices surged to a nine-month record high in early March, according to assessments by Platts, part of S&P Global Commodity Insights. This increase is driven by robust import demand and reduced export volumes from Brazilian suppliers.

Platts assessed North Asia chicken leg prices at $2,205/mt on March 3, up 3% week over week and 10% month over month, marking the highest level since the assessment was launched on June 3, 2024.

Japanese market reacts to inventory concerns

The price increase was primarily attributed to strong import demand from Japan for Brazilian boneless chicken legs 200 g and up, to meet consumption needs during the Golden Week holiday from April 29-May 6, according to Japanese market sources. This comes amid decreasing export volumes and rising offer prices from Brazilian suppliers.

Additionally, high pork prices and unstable supply due to the ongoing foot-and-mouth disease outbreak in Germany have further heightened the demand for chicken meat in Japan, a market source said.

Current offer volumes from Brazil are constrained due to limited supply availability and production shortages, according to industry sources. Brazilian suppliers are prioritizing sales of bone-in legs to domestic markets or other countries where they can achieve better profit margins.

Prices of boneless legs have been depressed and unsustainable in recent months, prompting the industry to seek price increases. Major Brazilian packers are now targeting sales above $2,200/mt CFR Japan levels, although these deals remain unconfirmed, a Japan-based trader said. Nonetheless, there is an expectation that acceptance of these higher prices will be necessary in the near future, suggested the trader.

Concerns regarding declining inventory levels have prompted Japanese buyers to secure additional volumes, contributing to the upward pressure on domestic prices, market sources noted. This follows a period of reduced exports from Brazil in December 2024 and January 2025, leading Japanese importers to anticipate a decrease in their previously oversupplied inventories.

By the end of February, cash market prices for imported boneless legs 200 g and up and sized boneless legs rose approximately 19% and 16% month on month, reaching Yen 415/kg ($2.77/kg) and Yen 425/kg, respectively.

However, if Japan begins purchasing Brazilian boneless chicken legs 200 g and up at over $2,200/mt CFR levels, smaller packers that had halted exports to Japan are likely to resume. This could result in increased inventory levels and a subsequent decline in domestic market prices, a source indicated.

South Korean market slows amid cautious buying

In contrast, chicken inventory levels in South Korea are now stable, attributed to an increase in import volumes in January, which has led to a decrease in domestic market prices. Buyers are currently awaiting new offers for shipments scheduled from April-May while reassessing their purchasing strategies.

This has resulted in a slowdown in market activity, according to a market source based in South Korea. The source also noted challenges stemming from rising Brazilian boneless leg prices, which surged by $100/mt in February, reaching $2,200/mt CFR Busan for shipments scheduled from March to April.