Growth in EU poultry production is expected to slow this year after rising significantly in 2018 due to reduced chicken breast imports partly caused by the major issues facing the Brazilian poultry meat sector.
Poultrymeat production grew by 5% in 2018, according to European Commission figures, rising by more than 8% in Romania, Bulgarian, Poland, Hungary and the United Kingdom. Production capacity continues to grow significantly in Eastern European, particularly in Poland
But this is set to slow to just 2% as prices adjust, assuming imports from Brazil do not return to full speed.
The fall of imports from Brazil last year, by 95,000 tonnes, was compensated to a substantial degree by increased imports from Ukraine (+48,000 tonnes) and Thailand (+45,000 tonnes).
China also increased its volumes (+5,000 tonnes) after the resolution of the WTO dispute that followed a Chinese complaint around larger market access. However, the total EU import volume remained lower than in 2016.
The high EU prices in 2018 are now under pressure, the EC’s report says.
While broiler prices were well above the last 5-year average during most of 2018, this year saw prices start below average and are expected to remain under pressure as they will be driven by the development of imports, which are expected to rise by 2% in 2019 following increased use of available quotas.
However, consumer demand for poultry meat keeps on growing. Per capita consumption was up 1kg to 24.8kg in 2018 and analysts believe it will grow to 25.2kg in 2019.
On the export side, EU poultry meat grew last year by 4% thanks to increased production. This is expected to moderate in 2019 to 2%.
Exports continued to show flexibility in destinations and products with falling exports to Saudi Arabia (-16%) and Hong Kong (-20%) compensated by rises to Ukraine (+6%) and most sub-Saharan countries, particularly Ghana and Benin.
Analysis of different cuts and their market destinations showed that the majority of boneless chicken was exported to Ukraine (33%), while France sent
Hong Kong (21%) and Vietnam (9%) were destinations of choice for wings, while halves and quarters were snapped up by Ghana (30%) and Benin (16%). Nearly a quarter of fresh/prepared meat was sent to Switzerland.
The analysis was published last week in the European Commission’s Short Term Outlook for EU Agricultural Markets in 2018 and 2019.
