bird flu, although China has cut its imports. The expansion of trade to these other destinations means Brazil is reducing its reliance on the Chinese market. Feed prices, so high in the first quarter, have fallen back and are now 5% lower YoY and with the corn supply looking good, there is likely to be negative pressure on feed prices. With an expected improve- ment in domestic consumption in the second half of the year, production is set to rise and a predicted forecast of 1.5% YoY increase in production remains valid, Rabobank reports. In Europe, the situation is more complex but the outlook is moderately positive. Feed prices are expect to stay around their current level, while energy prices and labour availability will challenge producers. AI risks will rise with the onset of winter, which could again impact supply. In terms of demand, consumers will be more price-driven as spending power will be under pressure. This will support chicken – especially dark meat – prices. Demand will therefore stay strong while supply growth will be restricted. The largest market concern would be the permanent restrictions on Ukraine imports which would increase supply. High feed prices will keep the supply of poultry relatively low in South Africa and with market prices high for beef, sheep meat and pork, consumers are likely to shift towards poultry and
eggs as the cheapest proteins. Imports may rise slightly but not enough to challenge the market balance in the country.
Tight supply While poultry imports face some uncertainty in China, poultry exports benefit from the tight supply in the global market, up 27% YoY in the first four months of 2022, and 35% in April alone. More stringent environmental regulations will begin to become a key entry barrier to the farming sector in the longer term. In Thailand the outlook for the rest of the year is promis- ing, with strong prices and demand, with returning tourists and consumers substituting pork for chicken. Exports are set to grow with the opening of the Saudi Arabia market and stronger demand from Europe. Feed costs are set to remain high but the industry will get some support from the tempo- rary zero-tariff import quota on 600,000 tonnes of corn from May to July and the strong currency. Commenting on the global situation, Nan-Dirk Mulder, Rabo- bank senior analyst for animal protein, said “Under these con- ditions, Brazil and the US come out on top, having seen strong demand in Q1. The EU has lost market share due to its many AI outbreaks and related trade restrictions. Thailand is recovering but remains relatively expensive due to its high local prices”.
▶ POULTRY WORLD | No. 6, 2022
Rabobank’s poultry outlook sees strong de- mand along with high imput prices. Margins are positive but lower than in previous years.
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