Wednesday, October 4, 2023

Rabobank: Global poultry markets, positive outlook despite war in Ukraine impact

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UTRECHT, Netherlands — According to the latest poultry report from Rabobank, global poultry demand and trade will remain strong this year. The industry, however, will face challenges related to historic high-cost inflation and logistic disruptions, which will especially impact low-income countries.

In most regions around the globe, poultry supply is relatively tight and prices are strong. The war in Ukraine has led to an increase of 20 percent to 40 percent in global grain prices, and the poultry industry will be challenged to pass on all of these higher costs to consumers.

“This will likely be possible in developed markets with high purchasing power, where supply is relatively tight, such as Europe, the U.S., and Japan,” said Nan-Dirk Mulder, senior analyst–animal protein at Rabobank.

There are, however, rising concerns in developing countries. These sharply rising costs, together with lower purchasing power due to weaker growth and cost inflation, could challenge local food and poultry consumption, and potentially lead to regional crisis situations.

Global poultry trade is expected to remain strong this year, following increasing foodservice demand.

“Brazil, China, and Turkey are well-positioned to benefit from this situation and take over some share of exports from the EU and war-affected Ukraine,” says Mulder. Although Russia will be affected by sanctions, it could selectively benefit from its very competitive position.

Global trade will be challenged by the ongoing inflation of transport costs as well as disruptions to logistics.

“Global poultry industries need a sharp focus on operations to offset higher costs and supply challenges. Optimal procurement, product efficiency, and feed formulation will be vital,” Mulder said.

Avian influenza will remain a key challenge, but the pressure should ease in the northern hemisphere summer. From a global perspective, AI cases in regions like Europe will disrupt trade in hatching eggs, which could impact supply in importing countries, as occurred in 2020 and 2021.

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