Source: Lisa M. Keefe, MEATINGPLACE, 1/29/16

The global pork market will remain weak in the first quarter of the new year, with the Rabobank five-nation hog price index hitting its lowest point since 2006, according to new research by the ag financial services firm.

The second quarter will bring some improvement, some of which will be a regular seasonal upturn, according to the "Global Pork Quarterly Q1" report.

"Recent positive demand and price developments in importing countries will start to support prices in exporting countries during Q1," said Albert Vernooij, analyst Animal Protein at Rabobank, in a news release about the report.

In China, imports are expected to further increase, supported by strong domestic prices and further destocking of the herd in 2016, which is being driven by stricter environmental regulations, the report said.

In the U.S., industry expansion is expected to slow after near-record supply growth in 2015, while packers' margins will remain strong due to limited available capacity. Exports are expected to pick up, supported by low prices, the repeal of country-of-origin labeling legislation and relisting of plants for export to China.

EU pork market recovery during the first weeks of 2016 will backtrack in the weeks to come, due to the suspension of the European Commission's Private Storage program on January 21. The program was intended to take excess pork off the market and support prices, but the target volume of pork was reached within just a few weeks.

In Brazil, the market is forecast to follow the trends seen in the fourth quarter of last year, due to continuing good domestic and export demand. This will, however, not result in higher prices due to the challenging domestic economy and low international prices.

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