Slow recovery for global pork market
Adverse exchange rates were the main driver of the declines in the global pork trade, according to the Rabobank Global Pork Quarterly Q4 report. The global market contracted suddenly in July, as depreciating currencies in main import markets pushed up prices of imported pork, which hampered import growth in the first part of Q3.
Supply growth in the main exporting regions - the US, EU and, to a lesser extent, Canada - was not able to reach the demanding markets in Asia. Combined with the decline in domestic production in these countries, rising pork prices were the result.
As a result, the Rabobank five-nation hog price index declined into Q3, followed by some recovery towards the end of the quarter.
“The global pork market shows a clear mismatch between supply and demand across the globe, with elevated price levels in one group of countries and pressured prices in the other countries,” said Rabobank animal protein analyst Albert Vernooij.
The global pork market will slowly improve towards the end of 2015 and into 2016, Rabobank predicts. Trade is expected to continue to rise, but exchange rate developments will impact both the volumes and returns in key export markets.
“In the longer term, the main question is how large the growth of pork production will be in importing countries and how this will impact global pork trade,” added Vernooij. “This is an issue, as herd developments in the exporting countries show that production is expected to increase further.”
