The outlook for the global poultry market is improving.
“Global demand has room for some recovery after a period of slow poultry consumption growth due to a weak global economy and rising prices resulting from cost increases,” stated Nan-Dirk Mulder, senior analyst of animal protein at Rabobank. cheaper feed costs and, thus, cheaper chicken prices are the primary drivers of this. The relatively low cost of poultry in many markets when compared to other proteins like beef, hog, and alternative proteins should be to its advantage.
After hitting a record-high of 7.2 million tonnes in the first half of the year, Rabobank anticipates that global trade will continue to be robust in the second half of the year. The volume was driven by a rise in the trade of raw poultry meat, whereas the commerce of processed poultry products fell precipitously, by 18% in contrast to the previous year.
Brazil, which leads the world in raw chicken meat cost-price ratio, gained the most from the bull market conditions. In comparison to the first half of 2022, the nation’s exports increased by 16%. According to Rabobank, if China and Thailand wish to hold onto their value position, they will have to turn their attention to the raw chicken trade.
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The paper states that profitability depends on the state of the market. Markets suffering from oversupply include those in the US, South Africa, Indonesia, and Brazil. Others have maintained a reasonable equilibrium, including Europe, Russia, Thailand, Mexico, Japan, and Malaysia. China, in contrast, has gone through both positive and negative margin eras.
Presently, the top exporting nations to China are Thailand (9%), the US (19%), Russia (10%), and Brazil (50%). Exports from the US to China decreased 31% in comparison to the previous year. Overall, shipments from the US have decreased by 2% so far this year compared to the same period last year.
Additionally, avian influenza (AI) is still influencing market circumstances. Japan has experienced the most damage from the disease, with nearly 10% of its layers being eliminated, second only to South America. The majority of the most recent outbreaks in North America and Europe have affected wild birds.
“New outbreaks will occur frequently, which often means temporary restrictions on global trade and shifts in trade flows,” Mr. Mulder stated, noting that AI is now prevalent in most countries.
He suggested that producers concentrate on the operational aspect. Due to a higher-than-expected harvest, corn prices have decreased dramatically since August, and wheat prices have also decreased.
“Even though we think feed prices will slightly decline, operating costs are still at all-time highs, and there’s a risk of further volatility in grain prices because of El Niño, as well as in the cost and availability of energy,” he stated. “Continuous leadership in terms of procurement and costs will be essential.”