Poultry markets pick up following ‘perfect storm’ disruption

22-09-2017 | | |
Poultry markets pick up following  perfect storm  disruption. Photo: Shutterstock
Poultry markets pick up following perfect storm disruption. Photo: Shutterstock

Broiler prices across the globe are showing strong signs of recovery after a ‘perfect storm’ of market disruption caused by avian influenza and the Brazilian ‘weak flesh’ scandal.

Slow market recovery from bird flu

Bird flu in both Europe and China disrupted markets over the period that covered the northern hemisphere’s winter, but demand and trade is slowly recovering in both regions, according to Rabobank’s latest Poultry Quarterly update.

Brazil’s meat export market rebuilding after scandal

Brazil, too, is rebuilding market share after its ‘meat scandal’ caused a near 10% drop in exports in Q2. Rabobank said it was partly price concessions that had seen shipments of poultrymeat from the country return to last year’s record levels in Q3.

Anti-dumping investigation still on-going

One threat to this recovery is the anti-dumping investigation launched by China in mid-August. This could take a year to conclude, but a provisional tax may be imposed in the interim months.

US producers take advantage of disruption

And in the US producers have snapped up opportunities caused by this disruption to move into export markets.

Global market strong despite drop inter-nation trade

Globally, the market report says prospects for chicken production remain strong, as tight supply continues to support prices, though overall trade between nations is down 5% year-on-year.

Bird flu impact on European markets

In Europe, Rabobank said that more than 1,000 cases of AI slowed expansion, cut bird numbers and hampered trade. While the virus has not left the continent, there has been a significant decline in new cases since April.

The result has seen firm prices for producers, and a 10% drop in imports has only supported this sentiment. Exports have only fallen 1% – an achievement, according to Rabobank, given the record number of AI cases disrupting trade.

“The industry is currently benefiting from improved market conditions after avian influenza (AI) pressure has reduced significantly, following the northern hemisphere winter months, even though it has not moved away fully,” according to Rabobank senior analyst Nan-Dirk Mulder.

“Relatively tight supply in the aftermath of the 1H 2017 perfect storm, caused by AI and the Brazilian ‘weak flesh’ meat scandal, is another positive for the global poultry industry. On the other hand, demand is recovering as AI has faded from the headlines.”

Jake Davies Freelance Journalist