MONTHLY ASIA CHICKEN WRAP: Strong chicken leg demand in Japan fuels North Asia price rally in Dec

North Asia chicken leg prices surged to an all-time high in December, driven by strong demand in Japan amid tightening supply.

Japan: Robust demand meets tightening supply

The Japanese chicken market in December was characterized by persistently high prices and robust demand, particularly for Brazil-origin boneless chicken legs. Platts' assessment peaked at $2,900/mt in late December, supported by strong buying interest and heightened competition among local importers.

Importers reported limited flexibility, with Brazilian packers strategically restricting offer volumes to support elevated prices after 2024's heavy exports to Japan depressed the market. In 2025, tighter supply and robust domestic and export demand in Brazil have left Japanese buyers with little choice but to accept higher prices.

"If we don't accept Brazilian suppliers' prices, securing sufficient volume becomes difficult," a local importer said, noting the competitive landscape among buyers.

Additionally, Japan's blanket ban on Spanish pork due to African swine fever contributed to a shift in protein demand toward chicken, adding further upward pressure on prices, according to a local trader.

Inventory concerns loom for 2026, with importers anticipating that stocks will tighten further as seasonal demand persists into spring. While some considered shifting to Thai-origin chicken, comparable pricing and limited Thai production capacity restricted this option.

South Korea: Bearish sentiment amid oversupply

South Korea's market was marked by a bearish tone, with demand for Brazilian boneless chicken legs subdued amid substantial arrivals following the lifting of Brazil's import suspension. Importers cited an influx of Brazilian shipments, raising concerns about oversupply.

South Korea's weak currency further eroded margins for importers already squeezed by high international prices and soft domestic market conditions.

"Demand is expected to stay low as Brazilian suppliers' prices remain high, and we cannot absorb those costs amid weak domestic prices," a local importer said, adding that imported boneless leg prices remained low at Won 4,300/kg.

China: Price ease as production rises

The Chinese poultry market is expected to see a softening of chicken prices in tandem with weakening pork prices, according to S&P Global Energy CERA analysts.

November's live chicken prices dropped 2% year over year to about Yuan 21.30/kg, while feed costs fell 2.2% to Yuan 4.21/kg. CERA analysts added that favorable feed margins are expected to drive higher chicken production in 2026, with stable feed costs projected into early next year.

Southeast Asia: Policy shifts and export growth

In Indonesia, the balance between poultry supply and demand was largely maintained, but the industry outlook remains fragile amid new government regulations, according to local producers.

Key concerns include the grandparent stock quota, the involvement of state-owned agencies in feed imports, and stricter controls on essential feed ingredients, such as soybean meal. Producers warn that these interventions could disrupt a mature ecosystem without addressing the core challenge of sustaining live bird prices by managing corn and SBM costs, which account for 50% and 20%-30% of feed expenses, respectively.

In Thailand, broiler prices fell 8.4% year over year in November, while feed costs dropped 10.3%, supporting producer margins, according to CERA analysts.

Thai chicken meat exports are forecast to rise 5.4% to 1.3 million mt in 2026, driven by slower domestic wage growth, which is expected to dampen domestic consumption, and improved market access, particularly to Japan and South Korea.

Outlook

Japanese importers are likely to face continued supply constraints and elevated prices, especially as inventories remain tight and alternative origins offer little relief.

South Korea's market is expected to stay subdued, with oversupply and weak margins limiting price recovery.

China's production is poised to rise, but price movements will depend on trends in the pork market and feed costs.