While the outlook for the international poultry business remains moderately positive for most markets, the fast-moving coronavirus pandemic is adding significant uncertainty. Covid-19 will materially affect commerce in 2020, and the ongoing African swine fever (ASF) challenges in the pork industry will bring additional complexity to global trade, according to Poultry Quarterly Q2 2020 report issued by Rabobank.
The Utrecht, Netherlands-headquartered banking and financial services company anticipates a further drop in pork production in Asia this year, which could lead to potential growth in local poultry production and international trade, if rising supply chain challenges can be managed. As coronavirus is now expected to cause a global economic slowdown, poultry demand could benefit among the proteins, due to its price competitiveness.
“In terms of markets, we expect more at-home poultry consumption and higher sales of non-perishable poultry products. Labor availability and logistics issues, such as those impacting distribution, will likely affect supply in the coming months. Coronavirus will also affect the global supply of poultry inputs such as feed additives and animal health products, due to disruptions at Chinese and other suppliers,” according to Nan-Dirk Mulder, Rabobank’s senior global specialist for animal protein.
The changing economic and market conditions brought by the deadly pandemic sweeping the planet will have significant impacts on global poultry in 2020. Global trade will face more volatility this year, with both destinations and origins affected, as well as pricing. Total volumes are likely to be affected temporarily, and trade should ultimately benefit from local supply issues related to coronavirus, ASF and avian influenza (AI).
The biggest coronavirus-related issues will be potential shocks in supply and demand driven by quarantine and logistics challenges and temporary changes in consumer demand towards at-home consumption, non-perishable products, etc. As this could impact supply and demand, it has the potential to also impact global poultry markets and pricing.
