Bullish outlook for global poultry industry

By Georgi Gyton contact

- Last updated on GMT

Rabobank said it expects strong fundamentals to keep white meat prices high
Rabobank said it expects strong fundamentals to keep white meat prices high

Related tags: Meat

Pricing across the global poultry market is expected to remain bullish, despite the recent Russian ban, according to a new report by Rabobank.

In its third-quarter poultry update, the analyst said worldwide supply of chicken was relatively tight and provided a strong base for margin improvement as further grain price reductions were expected next year.

The report suggested that the recently introduced restrictions on the global poultry trade by South Africa would benefit Brazil, together with the local industries in Russia and South Africa, where margins would rise significantly.

"Exporters in the US and EU will have to compete to find alternative markets, and while this will affect price levels, it should not have a significant impact on local poultry industries, as market fundamentals remain relatively strong,"​ said Rabobank.

On a country-by-country basis, the US saw poultry prices increase in Q2 driven by higher breast meat values, with production estimated to increase by 3% in 2015.

The outlook for the EU poultry sector was bullish, while strong exports were resulting in a positive outlook for Brazil. Argentina’s industry however has been affected by a downturn, due to weak consumer consumption a general slowdown of the economy.

In China, the markets were showing signs of recovery after concerns over avian influenza faded, and industry initiatives to reduce production capacity took effect.

"With poultry and pork prices being strongly correlated, a bullish outlook on pork prices will give poultry strong support in the coming months,"​ said the report.

The outlook for Japan in the second half of the year also remained bullish, while a recovery in Thailand’s market was being driven by better Japanese demand.

Nan-Dirk Nulder, analyst at Rabobank, said: "The global outlook for the poultry industry is bullish for the remainder of 2014.

"We expect strong fundamentals to keep white meat prices high, while dark meat prices may come under some pressure."

Related topics: Meat

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