The country will resume its live chicken supply to Hong Kong on Sunday but the scare caused by the H5N1 virus continues to grip the domestic poultry industry, which is undergoing unprecedented economic loss.

According to the local entry-exit department, South China's Guangdong Province will export 20,000 live chickens a day to Hong Kong from March 26 three weeks after a man in the province died of the avian influenza.

But Hong Kong authorities have been cautious to announce a date for the resumption of imports of day-old chicks.

Before the ban on imports was imposed three weeks ago, Hong Kong imported 30,000 birds a day from the province.

Nationwide, the epidemic, which has killed 10 people in China, has hit hard the poultry and relative industries.

Breeders said they needed more time to rebuild consumers' confidence about chicken products.

"It's a widespread gloomy situation (on the feed market)," said Xie Yuqing, president of the Xinzhongxin feed company in Yantai, East China's Shandong Province. "I still cannot see any hope."

He said yesterday that bird flu has hit hard the whole province, where roughly the country's 15 per cent of chickens were raised.

"Poultry-related companies, including State-owned and foreign-funded ones, are all suffering a great loss," he said.

At his company, a loss of hundreds of thousands of yuan has been seen in recent months.

"Now the sales in our company are hitting record lows," he said.

"Consumption and price of chicken products on local markets remain low."

He added that the scare was caused by the widespread publicity of the virus across the country.

Sources with the Ministry of Agriculture, however, have said that the domestic poultry industry has begun to improve, as the country's supporting policies, including tax exemption and subsidies, were in place and the epidemic was effectively brought under control.

Prices of chicken products began to rise, companies' losses shrank and breeders were earning small profits, sources said.

In Guangdong, the leader of a breeding company said yesterday that chicken product prices had climbed only slightly on the local market since last week.

"In general the price has remained low only half of what it is in bird flu-free seasons," said Jiang Weifeng, vice-general manager of a breeding company called Kwangfeng in Guangzhou.

"There is a panic about bird flu across the country, and it will take two or three months more for the industry to recover," he said.

(China Daily 03/22/2006 page2)