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RABORESEARCH: POULTRY FACING A PERFECT STORM IN 1H 2021
Dec. 23, 2020
Source: RaboResearch
After the big disruption caused by Covid-19 in 2020, the global poultry industry will face additional challenges in 2021, especially in 1H, according to the RaboResearch Q1 2021 Poultry Quarterly. Covid-19 will place ongoing pressure on foodservice and trade, and the consequent slow economic growth will lead to more price-driven market conditions. As market fundamentals appear challenging for 2021, the poultry industry should prepare for a tough year, says the report titled, "A Perfect Storm in 1H, Initial Recovery in 2H 2021."
"Looking forward, we see four main challenges for the global poultry industry: ongoing Covid-19 impacts on markets, high and volatile feed prices, China's African swine fever recovery, and the northern hemisphere avian influenza crisis," according to Nan-Dirk Mulder, senior animal protein analyst with Rabobank and the report's lead author.
Falling demand in China and Vietnam will push traders to find other markets, which will depress global markets in 1H. In 2H, stronger control over the spread of Covid-19 should lead to a gradual recovery of foodservice markets. This will greatly help global traders. But before recovery takes place, big stock levels need to be unwound.
The ongoing tough economic conditions will challenge all poultry companies and will require a very disciplined supply strategy and a strong focus on procurement and cost control.
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