In its newest evaluation of the worldwide poultry meat market, Rabobank describes the prospects for the sector within the fourth quarter of this yr as “bullish.” Nonetheless, it warns that over-optimism concerning the scenario might result in extreme development, and market imbalances in future.
Following two years of low development in poultry meat consumption — simply 0.6% in 2022 and 1.1% in 2023 — the analysts are forecasting enlargement of between 2.5% and three.0% for 2024. This could symbolize a return to historic development ranges achieved previous to the COVID pandemic.
Driving the forecast development are two fundamental elements, based on the report, particularly decrease feed costs and the comparatively excessive prices of competing meats. Consequently, hen costs are aggressive, and so retail gross sales are sturdy, fast-food demand is recovering. Moreover, poultry has a decrease environmental impression than most different animal proteins, and so is gaining in reputation in markets the place sustainability is rising public concern.
Regardless of these constructive alerts, the Rabobank report warns of the presence of some elements that symbolize a excessive danger in world markets. For poultry, these embody the approaching season of extremely pathogenic avian influenza (HPAI; within the Northern Hemisphere), geopolitical tensions, and the ever-present menace of feed worth volatility.
When it comes to hen meat commerce, costs remained sturdy in the course of the third quarter of 2024, based on the report. The quantity of uncooked meat traded in the course of the earlier three-month interval was up 5% year-on-year, regardless of a 30% discount in imports by China. Brazil has picked up a lot of the further commerce to different markets.
Brazil set for brand new hen manufacturing report
Regardless of self-imposed export restrictions from the state of Rio Grande do Sul following affirmation of an outbreak of Newcastle illness in mid-July, Brazil expanded its shipments of hen meat in the course of the second quarter of 2024.
Earlier this yr, extreme flooding in the identical state disrupted the availability of day-old chicks. The results have been nonetheless being felt, with larger costs for each chicks and stay chickens.
Trying forward for the remainder of this yr, Rabobank is forecasting a brand new manufacturing report for Brazil in 2024. This might quantity to a year-on-year enhance of between 1.5% and a pair of.5%, pushed partially by falling feed costs.
Dangers forward for European poultry market
Bullish market situations are ruling the poultry meat market in Europe, based on the Rabobank report. As breast meat costs peaked there, feed costs declined.
Nonetheless, for European Union (EU) member states, the analysts warn of uncertainty forward within the type of the European Union Deforestation Regulation (EUDR). Coming into impact on December 30, 2024, EUDR introduces new guidelines that may assure merchandise consumed by residents of the bloc don’t contribute to deforestation or to forest degradation worldwide. Moreover, it is anticipated to cut back each greenhouse fuel emissions and biodiversity loss.
Additional uncertainty is on the horizon for the area’s poultry sector as the height season approaches for the danger of HPAI outbreaks.
Regardless of these challenges, Rabobank described the outlook for the sector as “sturdy” for the remainder of 2024.
South Africa: menace of overproduction
With a peak within the third quarter of 2023, South African producers have been hit by a sequence of HPAI outbreaks. Manufacturing ranges have since rebounded, based on Rabobank.
Nonetheless, it warns that development in home demand is price-sensitive, and imported merchandise are usually cheaper than home hen meat. Moreover, feed prices could rise because of poor home harvests of corn and soy, and there’s a danger of the return of HPAI.
General, the analysts describe the prospects for the South African poultry business as “reasonably constructive.”
Combined prospects for Asia
Poultry producers in South and Southeast Asia — India, Indonesia, Malaysia, the Philippines, Saudi Arabia, and Thailand — have usually continued to keep up profitability, based on Rabobank.
For Thailand, the outlook continues to be sturdy, as hen demand is supported the restoration of tourism, rising home buying energy, and better exports of processed hen. Official forecasts level to manufacturing enlargement of two%-3% this yr.
There are completely different traits in play in China and Japan, the place current enlargement in home hen manufacturing have led to oversupply of their home markets. Rabobank places the most recent year-on-year enlargement figures at round 7% and three% in China and Japan, respectively. Mixed with low shopper confidence and tougher financial situations, this has led to decrease costs and increasing shares.
Regardless of the scenario, China is seeing heavy funding in white chicken and egg manufacturing services, based on the analysts, seemingly associated to forecasts of pork costs remaining excessive for the remainder of 2024.
With buying energy remaining weak, many Japanese customers have switched to hen from dearer meats. This development is anticipated to proceed till the top of the yr, however Rabobank warns that any upcoming spells of heat climate might scale back poultry meat purchases, and add nonetheless extra to the nation’s shares.
