Poultry shares gain from WHO report

Chicken feed producers and poultry providers recorded handsome gains on Wednesday and caught the fancy of investors after a World Health Organization report labeled processed meats as carcinogenic.

Shares in poultry producer Sunner Development Co Ltd rose 2.71 percent to 17.82 yuan ($2.8), while chicken feed processor and incubator Shandong Xiantan Co Ltd rose 2.01 percent to 35.06 yuan.

Shares in Shandong Yisheng Livestock & Poultry Breeding Co Ltd, one of China's largest poultry providers, gained 0.12 percent to 24.65 yuan.

A report from the International Agency for Research on Cancer under the WHO said that processed meat, such as sausages, bacon, and other products were a Group 1 carcinogen because of their links to bowel cancer.

Red meat such as beef and lamb were included in Group 2A as "probably carcinogenic to humans".

Analysts, however, said that industry fallout from the report would be minimal as dietary habits are difficult to change overnight. In fact, consumption of red meat is growing in China due to higher disposable incomes and growing desire to have more meat proteins.

"It is likely that in less than a month, people will forget about this report. Impact of such health researches is not as significant as food scandals, which may last several years," said Zhou Ting, a researcher with Shanghai-based Hengrong Consumption Ltd.

A research note from Shanghai-based Aijian Securities Co Ltd said that poultry and meat processors can benefit from the nation's plans to boost the agricultural sector and increasing average household income.

The average per-capita daily consumption of meat and poultry products in Chinese townships rose to 110 grams in 2014, a 4 percent year-on-year growth, according to data from ChinaFarming.com, an information portal focusing on the agricultural sector.

wuyiyao@chinadaily.com.cn