UTRECHT, The Netherlands – Referring to 2018 as one of the “most turbulent years in decades” in the global poultry industry, the forecast for the year ahead is expected to improve slightly amidst continued volatility in certain segments, according to Rabobank’s quarterly poultry report. In its Outlook 2019 summary, Nan-Dirk Mulder, senior analyst for animal protein at Rabobank and lead author of the report, wrote that China is a pivotal cog in determining the level of volatility and the affect on other markets in the global poultry industry. The impact of animal disease as well as trade disputes in China, especially in the first half of 2019, looms large in the level of volatility in the coming year. Avian Influenza (AI) and the pending trade negotiations between the US and China, as well as the evolving trade standards in Saudi Arabia, are critical factors in determining the growth of the global poultry industry. Other animal diseases could also have an indirect impact on poultry trade.
“We expect markets to gradually recover, with China in the forefront given the impact of African Swine Fever,” Mulder wrote in the report. “This will likely lead to increasing broiler prices in China, as some consumers substitute chicken for pork, and as global poultry trade focuses more on China as local Chinese chicken production is restricted by low breeding-stock availability. Countries who can supply China are well positioned to benefit from this situation, such as Brazil and some Eastern European countries (including Russia) who are just gaining access to Chinese markets,” according to Mulder.
Other critical factors worthy of watching in 2019, according to Rabobank, include: growing demand in China for poultry exports due to ASF and domestic constraints on China’s broiler supply; the resolution of the US-China trade dispute could negatively impact Brazil’s position as a poultry supplier to China; Brazil also will realize the fallout of this year’s decreased poultry supply and growing export volumes will likely replace shipments to markets in the EU and Saudi Arabia with exports to China, South Korea and the United Arab Emirates; the number of AI outbreaks, especially in early 2019.