“The Worst AI Ever” How Does AI affect the Prices of Raw Down Materials?
2017-03-23
There are various factors that determined the prices of raw down materials. Down businesses always pay attention to avian influenza (AI) among various factors since it directly affects down production and raw material prices. The worst AI that occurred in France in 2015 has been rapidly spreading over Europe and Korea. The following is about the effects of AI on raw material prices and PRAUDEN’s countermeasures.
AI spreads from France to Europe and is expected to increase down prices in Europe
AI that first occurred in southwest France in November 2015 has been widely spreading as of the end of 2016, in spite of Santé publique France’s intense efforts. About 4,500 ducks have died of infection in southwest France and approximately 7,000 ducks have been culled so far. Including the neighboring areas, the extent of the damage would be expected to grow.
<France reports another bird flu strain in southwest. – REUTERS>
Since December 2016, more cases of AI have been confirmed all over Europe including Germany, Denmark, Austria, Croatia, Switzerland, Hungary, Poland, and Finland (Source: Reports of Office International des Epizooties; OIE). Although many European countries have been culling poultry to contain the spread of AI, the avian influenza strain has been detected among wild birds and there has been mounting tension throughout Europe.
The aftermath of AI accelerated a reduction in duck and goose down production in major raw materials producing countries, particularly in France, Hungary, etc. Yearly production of South West France, accounting for 75% of the total duck down production in France, is expected to decrease by 40% to 45%. Fortunately, down prices, as of December 2016, have only slightly increased due to European suppliers’ preexisting inventory. Raw materials prices will rapidly increase in 2017 when the inventory is drained.
<Fluctuations in down prices in Europe –
Down prices which have been stabilized all through 2016 slightly increased by 5% to 8% in November>
Would the worst AI spreading in Korea affect down prices?
As of January 2017, Korea has been suffering from severe AI. AI has been repeatedly detected 13 times in Korea since 2003. In 2014, the year of the worst AI, 13,960,000 poultry were culled in 195 days. This year, Korea is suffering from severer AI and over 30,000,000 poultry were culled in only 50 days.
The yearly production of duck down and goose down in Korea is approximately 4,000 tons. Part of Korea’s duck down and goose down production is exported to Taiwan and is somewhat affecting the global prices of down & feather. The outbreak of AI is expected to damage the duck industry as well as the chicken industry. Accordingly, duck down production will decrease and its prices will increase around the world.
PRAUDEN Q&A about AI
Q. It is known that humans are not infected with, but a few infection cases were reported. Is PRAUDEN down safe?
A. Poultry that died or were culled due to AI are strictly segregated and disposed. Europe is striving to stop and prevent the spread of AI by all means. In order to contain the spread of the highly pathogenic avian influenza H5N8 that outbroke in Germany, France, Hungary, and the Netherlands, the European Commission (EC) adopted Commission Implementation Decision (EU) 2016/2122 for encouraging organic cooperation with EU countries and improving its monitoring system. Santé publique France, the public health authority of France which is a major raw materials producer designated the control areas (3km) and monitoring areas (10km) from the farms where AI was confirmed, and is keeping a close watch on neighboring poultry farms.
PRAUDEN imports duck and goose down and feathers generated after slaughtering ducks and geese raised for food through strict disease control processes, and there is no risk for infected raw materials. In addition, we move all raw materials to an airtight disinfecting room as soon as they arrive and fumigate them for seven hours, which is 14 times the legal minimum disinfection time of 30 minutes, at 70℃ or higher. In the case of an emergency, full-time veterinarians are posted in the plants for professional responses. PRAUDEN is always doing its best for safety from sourcing to processing. You can use PRAUDEN’s products with an easy mind.
Q. Raw down materials prices are expected to increase due to the aftermath of AI. How is PRAUDEN dealing with the situation?
A. PRAUDEN has strategic partnerships with large raw down materials producers of different countries and has been doing business with them based on trust for a long time. PRAUDEN is doing its best to secure raw materials using its Cheonan Plant and its overseas warehouses (Nanjing (China), Vietnam). Its fast and stable procurement of raw materials enables to provide down at stable prices.
By PRAUDEN Sourcing Part, Kim Jeong-mi/Go Min-jeong
