Geopolitical tensions will influence commerce flows
29 March 2024
3 minute learn
The outlook for international poultry markets in 2024 stays reasonably optimistic, with demand anticipated to steadily recuperate as a consequence of higher affordability pushed by decrease prices, decrease inflation charges, and rising incomes.
In keeping with a current Rabobank report, international poultry market situations are steadily recovering after a weak second half of 2023. A number of markets that confronted oversupply and falling costs have seen native market situations enhance within the first quarter of 2024. Usually, these enhancements had been pushed by manufacturing cuts to rebalance provide, which was pressuring demand.
“We anticipate international markets to proceed to enhance barely,” mentioned Nan-Dirk Mulder, senior analyst of animal protein at Rabobank. “Worth will nonetheless drive market demand, however much less so than in 2023, as a consequence of decrease client value inflation and better incomes.”
This can assist some restoration in demand for value-added poultry, like processed rooster and poultry ideas, and improved demand in foodservice. Enterprise alternatives into these markets will recuperate. Nonetheless, value consciousness amongst customers will stay a key driver. The important thing problem can be sustaining market steadiness with disciplined provide development.
“From a worldwide perspective, we anticipate development of 1.5% to 2% for 2024, pushed primarily by rising markets in Asia, the Center East, Africa, and Latin America. Development in Europe, the US, and Japan can be sluggish,” mentioned Mulder.
Distribution issues may influence international commerce flows
Potential distribution challenges are the most important wild card for the outlook as a consequence of geopolitical tensions within the Black Sea area, assaults within the Crimson Sea, and drought affecting water ranges within the Panama Canal. Given growing rerouting by way of southern routes, these challenges may influence international commerce in poultry and associated inputs, with rising prices, delayed provide, and constrained container availability.
Commerce flows to and from Europe, Asia, the Center East, and Africa are particularly weak to modifications. This might enhance give attention to regional commerce, the place attainable, or in any other case result in larger prices and probably delayed provide, particularly for items primarily produced in a single area, resembling feed components, tools, animal-health merchandise, or particular poultry merchandise like processed poultry or entire birds for the Center East. “Regional commerce flows in Asia, Europe, and the Center East are anticipated to profit from the scenario, whereas merchants delivery to these locations can be negatively affected,” provides Mulder.
Operational challenges will persist for producers
Feed prices have decreased by a median of 15% to 25% in comparison with 2023 ranges, however Southern Hemisphere areas and international locations like India and Indonesia are more and more uncovered to dry climate at essential occasions for his or her summer season crops, elevating native feed provide worries. Conversely, feed provides in Brazil and Northern Hemisphere international locations and areas just like the US, the EU, and Russia are good and face declining costs. From a provide/demand perspective, international commodity costs seem to have reached their lowest level, primarily as a consequence of issues about geopolitics, commerce points, and climate (resembling El Niño).
Avian influenza (AI) stays an ongoing concern. AI dangers will shift within the coming months to the Southern Hemisphere, the place extra international locations are turning to vaccines to guard the trade. “Any outbreak within the southern states of Brazil – particularly in a industrial flock – may have a considerable influence on international commerce,” explains Mulder. Explicit consideration can be paid to AI dangers in key exporting international locations like Brazil and Thailand, the place outbreaks may problem international market situations and commerce flows.
However these challenges, international poultry commerce is predicted to develop according to forecast demand development, with processed poultry commerce anticipated to steadily recuperate after a weak 2023.
