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Rabobank Poultry Quarterly Q421: Global market recovers on improved fundamentals, but southeast Asia struggles

Most global poultry markets are now moving toward profitable market conditions

29 September 2021, at 12:30am

Global poultry markets have seen significant improvement in Q2 and Q3 2021, with most regions now moving into profitable market conditions. They are benefiting from increased demand, as economies reopen in most regions, as well as from restricted supply.

This is especially the case for countries in the Americas, where industry profitability has improved. Currently, the big exception is Southeast Asia, where the Delta strain is challenging local conditions.

Rabobank clients can download the full report by clicking here.

Report summary

The global outlook for Q4 2021 is relatively positive, with ongoing strong demand and restricted supply, relatively flat (but high) feed prices, and further increases in trade volumes driven by recovering foodservice. However, in some countries, this has created food inflation concerns. The wild card for the outlook remains Covid-19. Depending on how it develops, Covid-19 could shake up markets and supply discipline in some more fragile places, like Europe and Southeast Asia.

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Some highlights from this report include:

  • Stronger local market conditions exist in all key regions, except Southeast Asia, due to reopening economies and relatively restrictive local supply. The US, Mexico, Russia, and Japan face particularly strong markets with good profitability for local producers.
  • Supply growth in 2H 2021 will be restricted in many regions by labor availability issues, which are especially affecting production in the US, the UK, and Thailand. Furthermore, ongoing avian influenza risks and high feed prices are impacting supply worldwide.
  • Feed prices are expected to stay relatively flat, with some increase in wheat prices due to weaker availability from the EU and Russia. Soymeal prices have been dropping due to rationalizing of demand and a more oil-focused approach among crushers.
  • Global trade saw a strong recovery in Q2 2021, with trade volumes at historical highs. Brazil and the US have benefited the most from strong trade, while exports from Europe, Russia, and Ukraine have dropped due to avian influenza and a slowdown in Chinese imports.