IMPORTS of poultrymeat into Europe and the UK are beginning to raise concerns of pressure on domestic prices in a historically tight market.
Rabobank’s latest analysis highlights an 80% increase in imports from Ukraine (120,000 metric tonnes, and a 1% (160,000 metric tonne) increase in Brazilian imports into Europe in the first half of the year.
In its market outlook report for the fourth quarter of 2023, Rabobank says wholesale, food processing and food service sector breastmeat prices are particularly affected, with the sector feeling the pressure from the “unlimited flow of fresh chicken imports from Ukraine”.
It is a sentiment highlighted by Europe’s poultry trade association AVEC at its AGM in early September as Poultry.Network reported last week.
It said that, while it supported the Ukrainian people and collective EU action, “we believe it is unfair that our sector should bear such a large share of the collective burden”.
The group has written to the EU Commission asking for safeguards to be put in place.
Despite higher imports, inflation and diseases such as African Swine Fever have reduced animal protein availability across all species.
This, combined with chicken’s competitive price point, has kept the poultrymeat market well-supported in Europe, though concepts such as slower-grown and organic have had a setback.
Chicken will, therefore, be the only animal protein to grow in Europe in 2023 at an estimated 0.5%-1% – lower than the 2-2.5% more often recorded.
Speaking specifically about European markets, the report says: “If the industry remains relatively disciplined in supply growth, as in previous quarters, it will certainly stay profitable, as feed costs are expected to drop further.”
Looking at the global picture, lower feed costs are expected to support market growth, making poultry more affordable and helping industry growth to recover, according to the report’s lead author, Nan-Dirk Mulder, a senior analyst at Rabobank.
“After a period of slow poultry consumption growth due to a weak global economy and rising prices resulting from cost increases, global demand has room for some recovery.
“This is driven mainly by lower feed costs and, therefore, lower chicken prices.”
However, Mr Mulder sounded a note of caution. “Although we believe feed prices will drop slightly, operational costs are still at historic highs, and risks of further volatility exist in grain prices due to El Niño and in energy prices and availability.
“Ongoing leadership in terms of costs and procurement will remain key.”