Middle East poultry price spread narrows as processor demand supports values

The unusually narrow price spread between chicken breast and shawarma in the Middle East is being increasingly linked to changing procurement patterns among processors, with market participants saying stronger demand for shawarma in further-processed products has continued to support prices.

Platts, part of S&P Global Energy, assessed chicken breast CIF Middle East, basis Jebel Ali, at $2,810/mt on July 2, while chicken shawarma was assessed at $2,790/mt, leaving a spread of just $20/mt. Chicken griller and chicken leg quarter assessments were at $2,270/mt and $1,570/mt, respectively.

Although the two products have traded close together since Platts launched its Middle East shawarma assessment on May 1, participants initially viewed the narrow spread as being largely driven by seasonal demand about Eid Al-Adha and relatively tight supply.

Market participants told Platts on July 2, however, demand from processors has emerged as another factor supporting shawarma values.

One market participant said some processors have increasingly used shawarma instead of breast meat in certain further-processed poultry products, including nuggets, helping sustain demand even as broader poultry buying has slowed.

Historically, market participants said chicken breast has typically commanded a premium of around $400-$500/mt over shawarma, due to its broader use across retail and foodservice channels. The current relationship, therefore, represents an unusual departure from traditional pricing dynamics.

Participants broadly agreed that current assessments continue to reflect prevailing market values, despite expectations that poultry prices could soften in the coming weeks. However, lower offers have yet to emerge, while continued demand for shawarma has prevented the traditional premium from widening.

Market participants said it is too early to determine whether the narrower spread reflects a temporary adjustment in processing demand or a more structural change in raw-material procurement. They added that the spread will likely remain a closely watched indicator as buying activity resumes after the seasonal slowdown.