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PHOTO: MISSET


STRATEGY ▶▶▶


Covid-19 and bird flu ongoing problem for global egg industry


BY TONY MCDOUGAL T


he sector has gone through the key stages of Covid-19 disruption which has seen huge channel shifts from food service to retail and online, and the closure of wet markets along with significant supply


chain disruptions. These have involved work absences, as well as logistical and distribution issues – particularly for day-old chicks – and issues around the supply/pricing of inputs, in- cluding feed additives. This is now moving into a second stage, one of economic crisis, which is set to run for part of 2021 until the Covid-19 vaccine kicks in. This will involve a downgrading in growth in animal protein but – as the lowest priced animal protein – eggs will benefit from this ‘trading down’ effect. Stage three, according to Nan-Dirk Mulder, Rabobank senior analyst animal protein, will come post-2021 and will involve a changing outlook for food supply, requiring different strate- gies across the globe. Speaking at the International Egg Com- mission’s ‘Global Economic Outlook for the Egg Sector’ webi- nar, Mulder said there had been large drops in food service sales with the EU/UK most affected during the first three quarters of the year. Similarly, countries that relied heavily on tourism, such as Spain, Thailand, Japan and Colombia had seen their domestic egg sales hit by Covid-19-related travel restrictions. While food services have been hit, supermarkets and online sales have boomed during lockdowns, seeing rises of 25% and 40%, respectively.


Global volatility Covid-19 plus African swine fever (ASF) in pigs has led to ma- jor global market volatility, but he stressed that it was impor- tant to understand that just 3% of eggs are traded globally. The countries most affected had been the EU (-7%), Ukraine (-10%) and Turkey (-22%), due to Iraq closing its borders be- cause of Covid-19, while the United States (+7%) had sorted its oversupply issues and had become increasingly competi- tive. He praised the US which had been struggling pre-Covid: “They have taken a very disciplined approach and reduced


▶ POULTRY WORLD | No. 1, 2021 37


Market volatility and change will continue to influence the global egg industry over 2021 as the ongoing impact of Covid-19 and issues linked to avian influenza affect production. That is the main take away from the presentation of Rabobank expert Nan-Dirk Mulder during the International Egg Commission’s ‘Global Economic Outlook for the Egg Sector’ webinar.


the laying hen flock which led to the return of higher prices”. Egg prices in the EU have stayed at a solid, relatively high level but, he warned, the future was not so bright due to a market oversupply and rising global feed prices: “We aren’t seeing the traditional upturn in prices in quarter four that we normally see in Europe,” he added. Looking at emerging markets, the past few months had seen huge volatility due to supply and demand issues. For exam- ple, the early unsubstantiated link between eggs and Covid-19 in India had led to a sizeable drop in production but prices had bounced back strongly since the summer. Latin American countries, especially Colombia and Brazil, but Paki- stan, the Middle East and Africa too, had shown similar vola- tility. Turning to China, Mulder highlighted the rapid recovery


Nan-Dirk Mulder (archive) brought IEC members up to speed on 2021 egg market dynamics.


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