The global poultry industry is on the road to recovery, according to the latest quarterly market report published by Rabobank.
The bank’s positive view is based largely on supply reductions in Brazil and the US, forecast lower feed prices and the impact of what it calls the “historic market downturn” in the Chinese poultry industry.
“China’s production is expected to be down by 5% this year and by 10-15% next year, positively affecting global market conditions,” said Rabobank, noting that this will bring at welcome improvement in global conditions after a relatively weak first half to 2016.”
Focusing more specifically on poultry prospects in the EU, the report states that the region is already performing “reasonably well” with the region’s poultry exports showing a “solid” 10% growth in the last six months, while imports have grown by 7%.
Judged in volume terms, however, the export increase has consumed 75,000 tonnes while the imports growth equates to 25,000 tonnes.
“The outlook for the EU market is positive,” added Rabobank, despite the potential of Eastern European production growth remaining as a market “wild card” after years of double digit growth.
“Strong local market growth, supported, for example, by VAT reductions on meat in Hungary, helps to keep markets in balance.”
Rabobank also takes the view that key exporting countries, such as the Netherlands and Germany, are in for a period of “no growth” due to restrictions on capacity expansion.
“New greenfield expansion projects in standard chicken will increasingly move east, therefore, because of cost and regulation advantages,” said the bank, “while Brexit uncertainty will keep UK investments limited for the time being.”