NEW YORK – Currency devaluations are providing headwinds to growth in the global pork market, Rabobank said in its Global Pork Quarterly Q4 report.
Adverse exchange rates have limited trade in pork, creating a mismatch between supply and demand. One group of countries experiences higher prices while other countries see prices that are stable or pressured, Rabobank reported.
“The global pork market shows a clear mismatch between supply and demand across the globe, with elevated price levels in one group of countries and stable/pressured prices in the other countries,” said Albert Vernooij, Rabobank animal protein analyst.
July saw an unexpected contraction of the recovery of the global market for pork in the second quarter. Prices for imported pork climbed on depreciating currencies in main import markets, Rabobank explained. This hampered growth early in the third quarter. Rising demand in China partially offset limited growth conditions, but reductions in domestic pork production in exporting countries caused pork prices to rise, Rabobank said.
Rabobank noted that market conditions will improve toward the end of 2015 and heading into 2016, but developments in exchange rates will continue to significantly impact volumes and returns in key pork export markets.
“In the longer term, the main question is how large the growth of pork production will be in importing countries and how this will impact global pork trade,” Rabobank said in its report. “This is an issue, as herd developments in the exporting countries show that production is expected to increase further.”