THE OUTLOOK for poultrymeat prices is improving as the foodservice sector reopens and the effect of a cut in chick placings earlier this year tightens supplies.
But cold stores remain full across Europe and countries that geared towards exports, rather than domestic supply, are still struggling.
The latest Rabobank Quarterly poultry outlook suggests volatility for poultry producers over the second half of 2020.
“In all markets, we tended to see a short-lived price peak (panic buying), a big price drop as containment measures were implemented, and, as new cases reduced, some new easing of restrictions,” the report’s lead author Nan-Dirk Mulder said.
While retail suppliers have seen strong demand, foodservice and traditional markets have been disrupted. Globally, traded prices of poultrymeat have dropped between 5%-25%.
Other protein markets such as beef and pork have also been hit by the cornavirus pandemic.
Poultry, however, is potentially well placed as a protein that shoppers choose during an economic downturn – and Rabobank estimates global GDP could reduce by 3.9% this year.
Prices across Europe have dropped 15% on average since March, with export-focused countries like Poland and the Netherlands worst affected.
As a contrast, retail demand in Germany, for example, spiked by 24% in April year-on-year.
Coronavirus dampened intra-European trade at a time when Eastern European producers battled with avian influenza-related closures, further compounding price problems.
The outlook is improving – in particular as chick placings dropped significantly since the second half of April, with the most significant drops have in Poland, the Netherlands, Hungary, and Spain.
“The impact is now being seen with some improvement in prices. This is likely the start of a fragile recovery, especially as lockdown restrictions are gradually being eased, which will help demand recover.”
The report also covers changes to trading patterns and notes that Brexit may already be having an impact on poultry movements from continental Europe to the UK.
Between January and April, poultrymeat imports into the UK dropped 26%, for example.
“The UK is expected to leave the EU market at the end of 2020, and this could shake up intra-EU trade.
“Along with Germany, the UK is the biggest intra-EU import market. Any new trade agreement with these exporters could impact the competitive situation in the EU,” said Mr Mulder.