International

Increased volatility in the global poultry market - Rabobank

Poultry

A sum of factors, including AI, high feed prices, scarcity in the breeding stock, and oversupply in several markets will act as barriers in the sector.

Posted on Mar 31 ,06:40

Increased volatility in the global poultry market - Rabobank

The poultry industry is to recover slowly in the following months, due to its high dependence on the foodservice sector (35%), says the latest quarterly outlook from Rabobank. As countries reopen foodservice, and while their control of Covid-19 improves, the poultry industry will start to recover. “In countries where several of these disruptive factors come together, broiler prices have risen to high levels. Some governments have started to intervene to protect their economies against price inflation,” according to Nan-Dirk Mulder, Senior Analyst – Animal Protein. This sort of situation could occur more often in 2021, driven by Covid-19, AI-related disruption of breeding stock, and high feed prices.
The best performing industries, for now at least, are in the US, Mexico, Japan, and Russia, while oversupply raises issues for poultry producers in the EU, South Africa, and Thailand.
Avian Influenza is also a problem for some of the largest producers in the EU but also for those in Russia and East Asia. The outbreaks have disrupted trade flows of hatching eggs, DOCs, and poultry from Europe and that is to have an impact on production in the following months. At the same time, a recovery in pig production in China and Vietnam could reduce the demand of poultry meat from these countries. Among the key points for producers is disciplined planning to increase supply, focus on reducing production costs, efficiency in production and the formulation of feed, as well as being prepared for large balances in demand caused by decisions made by government officials in relation to the pandemic.
At this moment, global trade is still highly competitive, with trade levels still down (-4%) and low prices. This market will recover slowly due to its high dependence on foodservice and the still high stock levels in import markets, concluded the analysts.

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