Trade China is ruling the global pork market
Albert Vernooij, Animal Protein analyst at Rabobank, forcasts that this circumstances will result in a further rise of the Rabobank five-nation hog price index supporting margins across the globe. He adds that Wildcards are feed costs and the Brexit induced changing exchange rates which could negatively impact the upswing, especially in the EU and the US.
China: Prices expected to peak during Q3The volatile prices in June are just a temporary blip in the positive mood in China. With supply forecast to bottom out and demand starting to pick up seasonally, prices are expected to peak somewhere during the coming months, supporting imports which will likely exceed 2 mill. tonnes in 2016.
EU: bullish market to remainChinese import demand and declining supply will continue to support prices and much needed margin recovery. Main challenge for the EU pork industry remains to limit supply expansion, while FX currently supports the EU’s competitive export position but domestic consumption remains laclustre.
US: Export to drive further price recoveryRelative tight supply, positive developing domestic consumption and optimism of increased exports will continue to support positive margins. The expected export growth due to rising EU prices might be limited with the US dollar strengthening in the aftermath of the Brexit vote.