Global poultry market outlook is positive, but concerns for Europe and Southeast Asia rising

Rabobank’s latest poultry report indicates market conditions for the global poultry industry have significantly improved. Most major regions are performing at break even or profitable levels. The reopening of economies in Europe and the Americas has helped the market to recover significantly and supported global trade. The big exception is Southeast Asia, where the Delta strain of COVID-19 is challenging the local situation. In Europe, supply is rising again, along with increasing oversupply concerns.
The outlook for global poultry markets remains strong, with ongoing strong demand and restricted supply, relatively flat – but high – feed prices, and further increases in trade volumes driven by recovering foodservice. However, in some countries, this has created food inflation concerns. “The wild card for the outlook remains COVID-19. Depending on how it develops, COVID-19 could shake up markets and supply discipline in some more fragile places, like Europe and Southeast Asia,” said to Nan-Dirk Mulder, senior analyst, animal protein at Rabobank.
Global trade saw a strong recovery in Q2 2021, with trade volumes at historical highs. Brazil and the US have benefited the most from strong trade, while exports from Europe, Russia, and Ukraine have dropped due to avian influenza (AI) and a slowdown in Chinese imports. Global trade issues, however, remain a key concern, as AI is still disrupting trade flows.
“In terms of market outlook, we expect strong demand for the remainder of 2021, despite these trade issues. Most markets are operating under tight supply conditions with improved foodservice demand. This will maintain strong trade flows,” said Mulder. Besides the trade issues, the key factors are AI, COVID-19 developments, labour, and container availability. “The container availability issue could potentially restrict poultry trade volumes later in the year. If so, it will be an upward factor for prices,” said Mulder.
Feed prices are expected to stay relatively flat, with some increase in wheat prices due to weaker availability from the EU and Russia. Soymeal prices have been dropping due to rationalising of demand and a more oil-focused approach among crushers.