Poultry market grows as Asia leads supply expansion

The global poultry trade has demonstrated resilience, growing by 1% in the second quarter of the year, despite facing significant market disruptions. This growth, reaching 7.1 million metric tonnes, is attributed to strong demand, particularly in Asia.

Market Context

The poultry market is projected to grow by nearly 3% this year, with Rabobank forecasting a 2.8% increase. This growth surpasses last year's 2.6% rise, as poultry remains a cost-effective alternative to beef and pork. Notably, Asian markets have driven this expansion, with China experiencing a 7% increase in its poultry industry in the first half of the year.

Trade Shifts

Despite a 40% drop in Brazilian exports due to avian influenza restrictions, other countries like Thailand, Russia, and Ukraine have capitalised on these shifts. European and US exporters have also benefited from additional opportunities. Geopolitical factors have influenced trade patterns, with China reducing imports from the US and increasing them from Russia and Thailand.

Supply Chain and Pricing

Supply chain challenges persist, especially in Europe, Africa, and Latin America, due to limited parent stock. Feed prices have stabilised at 2019 levels, although soybean supply remains tight due to reduced US planting and uncertain Chinese demand. Rabobank notes that US export flows will be crucial for price stability in the coming months.

Avian Influenza Impact

Avian influenza continues to pose risks, with outbreaks in both hemispheres affecting trade. Brazil's exports fell by 12% due to the virus, impacting shipments to major markets like China and the EU. However, countries such as Turkey and Thailand have gained from these disruptions, with significant increases in their export volumes.

Outlook

The global poultry market is expected to maintain its strength, although volatility from avian influenza and geopolitical tensions may persist. High prices in Europe and the US are likely to affect trade dynamics, potentially increasing imports and reducing exports. Brazil's re-entry into key markets could influence price trends, while Thailand and China's processed chicken sectors are anticipated to remain robust.

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