Global poultry prices may see an upward swing in 2019, as demand from China grows, and markets that have been in oversupply come into balance.
Nan-Dirk Mulder, the author of the latest Rabobank poultry quarterly, says that with African Swine Fever decimating pig populations in China, consumers are seeking out poultrymeat as an alternative. He suggests pork production could be down 10%-20% in the country.
Mr Mulder says in the reports that the past few quarters have been marked by major volatility because of a wide range of factors, including trade and disease restrictions and the US-China trade war.
Production was particularly high in many markets including the US, the EU and Thailand, he adds.
But demand was lower because of a general market slowdown and constraints on access to international markets following trade restrictions. This resulted in a period of falling poultry prices between Q2 and Q4 2018.
However, prices are now improving, according to Mr Mulder. “The outlook is changing, Rabobank is gradually becoming more optimistic that the market has reached a turning point, with global price levels starting to trend up – especially since global trade conditions have started to improve and have reached a record-high level in Q4 2019.
“Together with more supply discipline, this has led to improved market conditions."
This would be bullish for both local production and for global trade. But volatility will remain in 2019, driven by changing global trade access.
The full report can be accessed on Rabobank’s website.