Ten countries are reported to have avian influenza since South Korea's first outbreak in mid December, a list that now includes Vietnam, Japan, Thailand, Hong Kong, Cambodia, Laos, Indonesia, China and Taiwan.
Excluding China, according to figures from the American Soybean Association, these countries annually import about 19 million tonnes of soybeans and soybean meal in meal equivalent.
With 50 per cent of this figure fed to poultry, if there was a 10 per cent reduction in poultry production, the ASA predicts that about 1 million tonnes of soybean meal demand could be lost.
"The likely demand impact probably falls somewhere between 0.5 and 1.5 million tonnes on an annual basis with a similar quantity at risk in China," said the ASA in a statement.
China has dominated all cereal and oilseed markets this year, and soybeans are no exception. In a parallel situation to wheat, rising demand from China, pulling on already low global soybean stocks suffering from a drought in the US last summer, has pushed up the prices.
"China has been driving the oilseed market for the last two to three years," Josh Dadd, an economist at the UK's grain industry body, the Home Grown Cereals Authority told FoodNavigator.com.
The growing Chinese economy is largely responsible for the surge in demand - more money, more consumer buying power - that saw soybean imports more than double from 10.4 million tonnes in 2001-2002 to 23 million tonnes in 2003-2004.
The Chinese $5.4 billion soybean purchase from international markets last year exceeded domestic production for the first time. China, once a major exporter of soybeans, produced only 16.2 million metric tons in 2003.
Current high prices for soybeans will encourage more plantings around the world in 2004, but greater crop yields will also need a strong Asian market to keep on growing and buying, warned Dadd.
The recent crisis in the Asian poultry sector following the bird flu outbreak has exposed such vulnerabilities to the marketplace.
Bunge, a major US supplier to Asia for soyfeed for animals last week warned that it could soon start to feel the pinch if the avian influenza continues.
"While the avian flu will have a negative impact on demand, its effects are too early to quantify," Bill Wells, chief financial officer at Bunge told analysts last week. "There are expected to be some offsets due to increased demand for soymeal from the Americas," he added, referring to an increase in demand in the US and Brazil for chicken exports to Asia.
In a bid to tackle future epidemics such as bird flu the European Parliament yesterday voted to create a European Centre for Disease Prevention and Control (ECDC). Slated to be operational by 2005 the new EU-backed body - to be located in Sweden - aims to pool European expertise on disease control, allowing EU disease outbreak investigation teams 'to be put together quickly and efficiently,' said the Parliament in statement.