September 17, 2014

Global poultry outlook bright despite Russia ban

The global outlook for the poultry industry looks brighttill the end of 2014 despite Russia's ban on poultry imports from the US and its EU allies.

Rabobank's quarterly poultry report sees continued expansion in nearly all major poultry production regions for the rest of the year.

Any negative impacts the Russian food ban will have on US and EU poultry would be offset by strong fundamentals and lower feed costs, it says.

Rabobank, however, expects stiff competition between the EU and US for new markets in Africa, Asia and some Eastern European markets.

"The global outlook for the poultry industry is bullish for the remainder of 2014." said Nan-Dirk Nulder, Rabobank analyst. "We expect strong fundamentals to keep white meat prices high, while dark meat prices may come under some pressure."

Brazil will be the big winner as a result of the Russia poultry ban, Rabobank notes. Exports currently drive a positive outlook, although weak consumer demand is pressuring Brazil's domestic poultry market.

Asian poultry markets will recover despite ongoing food safety and disease issues, Rabobankadds. China's supply chain discipline will support higher prices and margin recovery, according to the report.

Poultry markets in Russian and South Africa will see sharp increases in prices as both countries operate under tight market conditions and weak demand. Growth in margins will depend on the possible establishment of a price ceiling by the Russian government, Rabobanksays.