Source: MEATINGPLACE, 9/10/13


Rabobank predicted further declines in grain and oilseed prices coupled with high competing protein prices would support an improving outlook for the global poultry industry, but cautioned that Asia would likely see a trade slowdown.

In its latest report on the subject, the bank also said the rapid recovery of Mexican domestic production combined with its decision to allow Brazil access to its markets will be of mild concern to U.S. exporters.
U.S. companies are benefiting from a well-balanced supply/demand situation, but Russia and South Africa are still suffering from oversupply driven by structural changes in market conditions, Rabobank analyst Nan-Dirk Mulder said.

Conditions are ripe for more regional cross-border consolidation, such as in Europe, or global alliances between companies from low-cost, grain-surplus countries in the Americas and companies from grain-deficient countries such as China, Mulder said. “Many producers are currently in better shape than in recent years, and further consolidation could help local industries to better balance local markets,” the analyst said.

An economic slowdown in key emerging economies, currency depreciation in Japan and volatile demand in China and Hong Kong will keep global trade volume growth relatively flat for the rest of the year, according to the report. Trade streams will shift temporarily away from Asia and toward the Middle East and Africa as a result.

The EU will see some additional price support from reductions in pork production later this year, while the industry’s recovery in China will depend on its ability to limit further H7N9 avian influenza outbreaks, Rabobank said.

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