According to the latest Rabobank Poultry Quarterly, global poultry has experienced gradually improving market conditions, with the trend expected to continue over the coming months.
It said the main driver for the market improvement has been a more balanced supply in key trading markets like Brazil Thailand, the US and the EU, and that this improvement has come despite global trade volumes being disappointing.
Rabobank’s senior protein analyst Nan-Dirk Mulder said the sector has been “on a rollercoaster ride” for the past year due to oversupply in late 2018 and early 2019 which hit prices. South Africa, Russia and Indonesia are all reported to still be struggling with oversupply.
“The balance in the market is gradually returning, driven by stronger dark meat demand from Asia and Africa,” said Mulder. “Having said this, global trade volumes in Q1 2019 were just 2.8m metric tons, and at their lowest since 2015, indicating ongoing tough issues in poultry trade and ongoing low breast meat prices.”
China continues to have an impact on the international meat industry, and poultry is no different. Mulder said that the “bullish Chinese market situation will have some impact on global markets”. Although its influence is mostly restricted to pork, Rabobank said that China will have an impact on markets that can export to it such as Brazil, Thailand, Argentina and shortly Russia.
China is the best performing poultry industry, with exceptionally high poultry prices due to the shift from pork to poultry as a result of the growing African Swine Fever (ASF) epidemic.
The effects of disease pressure are still being felt, with a series of AI outbreaks throughout the world, including Mexico (H7N3), Vietnam, Cambodia and Nepal (H5N1), and Taiwan (H5N2). In Europe, there are still several H3 LPAI outbreaks in Belgium, causing an unusually high mortality rate.
Although all these outbreaks have significant impacts on local industries and communities, the number of outbreaks is lower than in the previous years. The biggest disease impact on industry and markets is currently in pork, where ASF is significantly affecting pork production in China, since it was first reported in August 2018. Since February 2019, ASF is also affecting pork production in Southeast Asian markets like Vietnam and, more recently, Cambodia.