China's growing Middle East poultry footprint pressures traditional suppliers

Chinese poultry exports to Middle East markets more than doubled year over year in June to 18,160 metric tons, putting pricing pressure on traditional suppliers that industry sources say is preventing them from raising prices despite tightening fundamentals elsewhere.

The growth is concentrated in the region's top importing nations, with China shipping 12,066 mt to six key Gulf markets -- the UAE, Iraq, Qatar, Kuwait, Saudi Arabia and Oman, in June alone, according to China Customs data obtained by Platts, part of S&P Global Energy.

"Over supply from China. Chinese products are making a huge move," said a Middle East-based trader, highlighting the market disruption caused by the influx of competitively priced Asian poultry.

Market penetration

The UAE remains China's largest regional customer at 4,044 mt in June, up 25% from the previous year. But Iraq has emerged as an unexpected second-place destination with 3,395 mt, while Qatar imported 2,900 mt and Kuwait took 1,727 mt. Saudi Arabia, starting from zero Chinese imports in June 2025, reached 567 mt by June 2026.

The competitive threat extends to pricing, where Chinese suppliers leverage significant cost advantages. Chinese skin-on boneless breast, in July was offered at $1,300/mt FOB China for first-half August loading, compared with Brazilian boneless skinless breast at $2,850/mt CFR Khorr Fakkan -- a $1,400/mt differential.

Last heard refrigerated container rates from China's Qingdao port to key Middle East destinations ranged from $9,000 per reefer to Jebel Ali to $14,000 to Sohar in the second week of July, making total delivered costs from China significantly lower than those from competing origins.

Pricing pressure

The sharp increase in Chinese exports comes as traditional suppliers, particularly Brazil, continue to face elevated logistics costs and higher replacement values following recent disruptions to regional shipping.

Market participants said importers had been willing to absorb higher prices from established suppliers because of consistent quality, certification and reliable supply. However, the growing availability of lower-priced Chinese poultry has made it increasingly difficult for exporters to raise prices.

"You have to keep an eye on China all the time because prices can't go up when cheap Chinese products enter the market," said another regional trader.

Participants said Chinese poultry is increasingly acting as a ceiling on regional prices, giving importers greater negotiating power even when they continue sourcing most of their requirements from traditional origins.

Opportunistic buying

Despite the significant price advantage, market participants said Chinese poultry has yet to establish itself as a preferred long-term supply origin in the Middle East.

Instead, buyers said Chinese cargoes are typically purchased when prices become exceptionally competitive, allowing importers to reduce procurement costs without fundamentally changing their long-term sourcing strategies.

"Even if they have the certification, most of them are not reliable for long-term commitment," a Gulf-based importer said, adding, "Buyers purchase because the price is attractive, but not for long-term programs."

Participants said importers continue to rely primarily on established suppliers such as Brazil for regular procurement, while Chinese products are used selectively whenever the price advantage becomes too large to ignore.

Market impact

The latest customs data suggests Chinese exporters are steadily increasing their presence across the Middle East's largest poultry-importing markets, introducing a new layer of competition that traders say is reshaping regional price negotiations.

While Chinese volumes remain well below those supplied by Brazil, participants said the availability of lower-priced cargoes has become an increasingly important reference point during negotiations, limiting the ability of traditional exporters to secure higher replacement values.