CORONAVIRUS has complicated global poultry markets that were already being heavily influenced by African Swine Fever.
The latest analysis by Rabobank for the second quarter of 2020 says the outlook for poultry markets is “moderately positive” – but there is now significant uncertainty that is expected to lead to a global economic slowdown.
Poultrymeat, as a competitively priced protein, could benefit, but supply chains for inputs like feed additives and animal health products are likely to be disrupted, Rabobank’s Nan-Dirk Mulder said.
ASF challenges will bring “additional complexity” to markets, he added. “We expect a further drop in pork production in Asia this year, which could lead to potential growth in local poultry production and international trade if rising supply chain challenges can be managed.”
Key points about global poultry trade
- Markets were “tough” in 2019’s second half, with a 1% drop in global poultry trade flows despite increased demand in China
- Trade issues include Brexit, US-China’s agreement, new trade restrictions the Middle East and the opening of trade between the US and EU and some Asian countries
- China has been severely disrupted by covid-19. Wet markets have been closed and consumers have not been eating out. Local broiler production is down by about 40% in February.
- Ports in China are subject to delays and traders are being forced to switch to alternatives. Coronavirus problems with would-be exporters are also having an impact.
- China, Africa and some Southeast Asian markets were “major growth markets” in 2019, driving up dark meat prices for countries with good access, such as Russia, Argentina and Brazil
- Ukraine and Russia are both significantly expanding their trade position, focusing on Asia and the Middle East.
The poultry industry in the EU had a “tough” 2019. Oversupply challenged industry margins, Rabobank said, driven by expansion in Eastern Europe.
Avian influenza outbreaks at the beginning of the year would tighten markets, while coronavirus was expected to improve demand, it added.
Prices are more than 5% above the 2015-2019 average.
As a result, the outlook for European poultry prices in the first half of the year remains “relatively positive” but under more volatile conditions.
Poultry will capture market share as the EU slows down, and more products will be sold at retail at the expense of the foodservice sector, Rabobank said
The UK is expected to leave the EU at the end of 2020, and this could shake up intra-EU trade, the report said.
“Along with Germany, the UK is the biggest intra-EU import market, and poultry industries in the Netherlands and Poland are highly dependent on exports to the UK.
“Under any Brexit scenario, trade will surely be more difficult, and local UK production will likely increase.”