Increased volatility in the global poultry market - Rabobank

Rabobank's latest quarterly forecast says the poultry industry will slowly recover in the coming months due to its high reliance on the foodservice sector (35%). As countries reopen catering establishments and control of Covid-19 improves, the poultry industry will start to recover.

“In countries where several of these disruptive factors are combined, broiler prices have risen to high levels. Some governments have begun to intervene to protect their economies from inflation and rising prices,” says Nan-Dirk Mulder, senior analyst at Animal Protein. This situation may occur more frequently in 2021 due to Covid-19, disruption of breeding stock and high feed prices.

The most efficient industries, at least for now, are in the US , Mexico, Japan and Russia, while oversupply creates problems for poultry producers in the EU, South Africa and Thailand.

Avian influenza is also a problem for some of the largest producers in the EU, as well as producers in Russia and East Asia. The outbreaks have disrupted the trade flows of hatching eggs and birds from Europe and this will impact production in the coming months. At the same time, the recovery of pig production in China and Vietnam may reduce the demand for poultry meat in these countries. Among the key points for producers are planning to increase supply, focusing on reducing production costs, production efficiency and improving feed efficiency, and preparing for a significant balance in demand caused by decisions made by government officials regarding the pandemic.  

At the moment, world trade is still highly competitive, with the level of trade still declining (-4%). This market will recover slowly due to its high reliance on catering and still high inventory levels in import markets, the analysts concluded.