Over the whole year, we can expect to see a slight increase in global poultry production (+0.8% YOY). This is the result of poultry expansion in China and Vietnam – where African swine fever (ASF) has reduced pork availability – and also from expansion in the US. The rest of the world will be operating in an environment of shrinking production. There is a global shift from foodservice to retail, benefiting retail-focused companies.

Global trade is very competitive and volatile, with most import markets reducing volumes. “Trade into ASF-affected markets like China, the Philippines, and Vietnam has become more important, and this raises risks as local production recovers. Exporters like Brazil, the US, and Russia are focused on China, with export volumes expanding quickly, but with price concessions,” according to Nan-Dirk Mulder, Senior Analyst – Animal Protein at Rabobank. Prices are highly pressured for all cuts, especially breast meat, legs, and feet.

“Balancing local supply with volatile demand will be the big challenge for global producers, and the experience so far this year shows how difficult this is,” says Mulder. Differences in expected poultry production growth are bigger than ever, ranging from 15% growth in China to 5% in Vietnam, contrasting with -8% in Thailand and more than -10% in India. www.rabobank.com