Protein market Poultry benefits from volatile prices

by Editor fleischwirtschaft.com
Wednesday, July 08, 2020
Although demand will recover, supply-demand imbalances, exchange volatility, and access issues could distort trade flows.
Photo: Imago Images / Xinhua
Although demand will recover, supply-demand imbalances, exchange volatility, and access issues could distort trade flows.

The global poultry industry is recovering from a storm that hit in the first six month 2020, and the outlook is gradually improving. Poultry demand will be more bullish in the second half, as Covid-19 containment measurements are eased, lifting demand through foodservice.

Poultry demand is expected to improve in the second half year, reports Rabobank. The biggest market driver will be the economic downturn, making global markets more volatile and price driven. Such conditions are generally positive for poultry, being the cheapest meat protein with a short and flexible production cycle.

Prices will see some recovery after historic lows in the first half year. Breast meat should benefit from the reopening of foodservice, although trade will remain difficult. Dark meat will likely do better. Supply in some markets will be tight, due to reduced parent stock.

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(Bild: Imago Images / Christian Schroedter)

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“Volatility could be exacerbated by ongoing challenges to balance supply and demand and by exchange rate instability. On the other hand, the relatively bearish feed price outlook will provide producers some relief on the cost side of their businesses,” says Nan-Dirk Mulder, Senior Analyst– Animal Protein at Rabobank.

Global trade will remain unstable in the second half year. Although demand will recover, supply-demand imbalances, exchange volatility, and access issues could distort trade flows. A trend of buying local may also have an impact. Trade agreements and restrictions have the potential to keep shaking up global trade flows as well. The US-China trade relationship, Brexit, and a move in the Middle East to further improve food security are the main factors that could disrupt global poultry trade.

Hühnerbrust
(Bild: Imago Images / ZUMA Wire)

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