May 2, 2017

 

 

Continuing strong Asian imports are supporting pork prices across the globe, with the supply volume in each region determining the actual level, agricultural lender Rabobank said in its latest global pork quarterly report for the second quarter.

 

It added that the main import markets in Asia could easily absorb rising supply from the Americas.

 

"The overall outlook is positive right now", said Justin Sherrard, global strategist animal protein at Rabobank. "The demand market will continue throughout the second quarter, supporting margins along the supply chain".

 

The Rabobank report said the forecast 4% increase in US pork production this year is the driving force in the American pork industry. With consumption moving to record levels, exports will determine the final price level, it added.

 

In China, Rabobank said the government-initiated relocation of pork production away from waterways and densely populated areas would support good price levels and stabilise imports in the coming months. Local supply is seen to start recovering in the third quarter, with investments of recent years coming on-stream and reaching their potential.

 

EU pig market 'booming'

 

The report described the European pig market as booming, with prices rapidly rising due to pressured supply. "This situation will continue towards summer, with record piglet prices during Q1. Exports remain the wild card for the market's price top, with high prices limiting the competitive position and resulting returns", it said.

 

The report also claimed that the recent tainted-meat scandal has had little, if any, impact on Brazil's export volumes and related prices. In fact, it said, Brazil "is steadily growing its position in pork export markets, with rising volumes flowing into all main destinations, especially China". 

 

Rabobank also noted that the traditional production approach of producing as much pork as possible and selling it to the highest bidder globally is changing, in response to some consumers' concerns around animal welfare, human health and the environment. 

 

With these new concepts, farmers are looking for a steadier and (hopefully) a higher margin, slaughterhouses are safeguarding sales channels and retailers are setting up dedicated supply chains to have 100% tracking and tracing or for specific niches, the report said.-Rick Alberto