Source: Susan Kelly, MEATINGPLACE, 3/22/19

Trade conditions are gradually improving for poultry due to rising global demand, especially from China, which is expected to face a protein shortage this year, Rabobank said in a summary of its latest Poultry Quarterly report.

Poultry prices slumped between the second and fourth quarters of last year amid high production levels in many markets, including the United States, European Union and Thailand. At the same time, demand dropped as trade restrictions placed constraints on access to international markets, Rabobank said.

That’s now changing. “Rabobank is gradually becoming more optimistic that the market has reached a turning point, with global price levels starting to trend up — especially since global trade conditions have started to improve and have reached a record-high level in Q4 2019. Together with more supply discipline, this has led to improved market conditions," said Nan-Dirk Mulder, senior animal protein analyst.

Rabobank predicted the global poultry industry will see trade conditions gradually improve throughout 2019 with demand, especially from China, as the main positive driver. Poultry is expected to be the main substitute for pork in that country as African Swine Fever reduces Chinese pork production by 10 percent to 20 percent, Rabobank said. In addition, a potential U.S.-Chinese trade agreement could shake up trade, the bank said.

Ongoing EU-Brazil and Saudi-Brazil trade restrictions are affecting breast meat and whole bird prices, Rabobank said. There are rumors that Mexico could impose safeguards on U.S. chicken and South Africa could do so on Brazilian chicken, the report added.

The opening of China for Russian poultry exports and interest by Ukraine in strengthening its position in the market could be additional factors affecting trade.

For more stories, go to www.meatingplace.com.