By Ulf Laessing and H. Hashim Ahmed

KUWAIT, April 4 (Reuters) - More than a month after bird flu was detected, chicken and eggs are still on the menu in Kuwait, with imports assuring supply after two thirds of the Gulf Arab state's egg-laying hens were culled.

Kuwait has confirmed 106 cases of the deadly H5N1 strain in birds and banned the import of live birds. Poultry shops have been closed since the end of February and four Asian workers were hospitalised with suspected avian influenza on Tuesday.

But restaurateurs, scientists and poultry industry sources said that while poultry prices had risen, demand was being met with increased imports of frozen chicken from countries such as Brazil, India and France.

"There are no problems with supplies. People are still ordering eggs and chickens," said Rana al-Omani, who runs a fast food restaurant in downtown Kuwait City.

She said the price of fresh chicken breasts had risen by 50 percent and eggs by 20 percent in the last three weeks, but many consumers had not changed their eating habits. "I still eat chicken. I am not afraid of bird flu," said Kuwaiti engineer Badr, who was eating shawarma, a popular sandwich in the Middle East filled with grilled meat or chicken.

Kuwaiti authorities have yet to release precise figures on the economic impact of the culling of 1.1 million hens, or 60 percent of the country's layers, announced on Saturday.

Over 1.7 million birds have been culled, mostly chickens, but also turkeys, quails and even falcons, which are bred for hobbyists and are popular in the Gulf.

No human cases of bird flu have been confirmed in Kuwait, a wealthy oil exporter which does not rely much on farming.

Humans who contract bird flu generally have had contact with infected birds, raising them at home or working on bird farms.

TOO EARLY TO SAY

Experts said the full impact of the outbreak may not have been felt yet since suppliers were well stocked.

"It is too early to say. We still have production from earlier, we still have it in the market. You don't feel the problem right now," said Afaf al-Nasser, a food researcher at Kuwait Institute for Scientific Research (KISR).

She said Kuwait's poultry farming industry was still functioning since most cases of bird flu, particularly in hens, had been detected in farms in the remote desert area of Wafra near the Saudi border, slowing the spread.

"There are still areas unaffected," she said.

According to a recent study by her institute, 47 percent of poultry meat and 55 percent of table eggs for local consumption were being produced in Kuwait, with the rest coming from abroad.

Poultry firms in Kuwait were reluctant to talk about bird flu, with one source saying they did not want to disclose damages until compensation talks with the government were over.

Experts say major fast food chains such as McDonald's <MCD.N>, Burger King <BKC.N> and KFC <YUM.N>, popular in Kuwait, were not strongly dependent on the local industry anyway.

Avian flu still mainly infects birds, but experts fear that if the H5N1 strain mutates into a form easily transmitted from person to person, it could sweep the world and kill millions.

The human death toll is nearing 200 globally and Gulf Arab states host millions of foreigners from around the world.

Although the impact on diets has been minimal, the outbreak has made some people think twice.

"I was blowing eggs for the kids to decorate for Easter then I realised that it wasn't a good idea to be doing that, with bird flu going around," said a South African teacher, referring to a Christian holiday where children traditionally paint eggs.

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