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 is challenging the local situation, finds the Dutch bank’s latest poultry market overview.
The outlook for global poultry markets remains strong, it said, with robust 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, said the analysts.
The wild card for the outlook remains the coronavirus threat. “Depending on how it develops, COVID-19 could shake up markets and supply discipline in some more fragile places, like Europe and Southeast Asia,” according to Nan-Dirk Mulder, senior analyst, animal protein at Rabobank.
Feed prices
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 rationalizing of demand and a more oil-focused approach among crushers, commented the team.
The return of wet weather – after a year of dryness – in one of the biggest poultry producers, Brazil, will be key, as September should see the start of soybean plantings. A possible return of La Niña conditions in Q4 could mean further dryness ahead, they said.
“Meanwhile, in the US, investors are eagerly awaiting soy and corn harvest results.”
Trade recovery
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, reads the report.
“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.
A lack of container availability could also potentially restrict poultry trade volumes later in the year. “If so, it will be an upward factor for prices.”
Labor challenges
Another potential wild card for the industry is labor availability. Many regions are experience labor shortages and that is affecting production in the US, Europe, and Asia, said Rabobank.
“There are significant challenges with labor availability at plants all over the world due to tight COVID-19 health requirements and immigrant laborers returning home. Solving this issue will be a key topic for many producers.”