Global Bird Flu Outbreak Sparks Market Volatility

Strategic Insights -

International health experts have expressed concern over the spread of bird flu, with cases reported in Asia, Europe, and Africa, and the virus has caused a significant impact on global markets, particularly in the poultry and livestock industries.

Key Takeaways:

  • The Chicago Mercantile Exchange live cattle futures rallied due to higher boxed beef quotes and oversold conditions on technical charts.
  • Japan has resumed imports of U.S. beef, pending confirmation that Washington's safeguards against mad cow disease are effective.
  • European governments failed to agree on allowing poultry farmers to vaccinate their flocks, amid questions over the effectiveness and safety of the vaccine.
  • The World Trade Organization has demanded that the European Union lower its import tariffs on salted chicken from Brazil and Thailand, which has had little impact on Brazil's poultry-export market.
  • Tyson Foods Inc. and Perdue Farms Inc. have agreed to pay fines under proposed settlements with the state, which had accused the two poultry companies of environmental violations.
  • Malaysia began culling birds and launched house-to-house inspections for sick people in an area where 40 chickens died from the H5N1 bird flu virus.
  • Brazil released its bird flu prevention strategy, which has caused the poultry industry to wonder about the effectiveness of the plan.
  • India's outbreak of bird flu is localized, but the rural economy is being hit due to the situation being blown out of proportion.
  • Indian authorities plan to widen the area of culling chickens, which should lead to the slaughter of about 100,000 more birds.

Statistics:

  • 213,720 metric tons: Brazilian chicken exports in January this year, up 13.73% from the same period in 2005.
  • 40: The number of chickens that died from the H5N1 bird flu virus in Malaysia.
  • 100,000: The estimated number of birds to be slain in India as part of the expanded culling measures.
  • 1532ET: The time the article was published.
  • 02-21-2006: The date the article was published.
  • $375.76: The price at which CME hit a 12-22-2005 uptrend signal.

Sources:

  • Dow Jones Commodities News via Comtex (02-21-2006)
  • AP (Geneva, Tokyo, Brussels, Dublin, Sao Paulo, Kuala Lumpur)
  • Dow Jones (Brussels, Brussels, Sao Paulo, Sao Paulo)
  • AP (Richmond, Va., Kuala Lumpur, Sao Paulo)
  • Dow Jones (Chicago, London, Beijing)
  • Comtex SmarTrend(SM) Alert (02-17-2006)
  • Dow Jones Newswires (Curt Thacker)