Asian markets will drive poultry meat production

Infographic guide Ukrainian Agribusiness 2018/19


The outlook in 2020 is slightly more positive than it was in 2019 according to Rabobank, reports.

A key driver of the gradual recovery of the poultry market will be ongoing strength in trade flows to Asia in order to supply African swine fever-affected markets such as China, Vietnam, South Korea, and the Philippines. These trade flows will be positive for dark-meat prices, though they will be subject to increasing volatility.

"African swine fever (ASF) will increasingly push chicken expansion in Asia in 2020," according to Nan-Dirk Mulder, Senior Global Specialist — Animal Protein. "This will help fill the gap in local protein markets affected by ASF, but it also raises concerns about future oversupply. Strong growth in local supply — from poultry companies and pig farmers who invest in poultry farming — and rising imports are boosting supply. This will likely result in local price volatility in 2020."

Global markets will be highly volatile in 2020. Dark-chicken meat prices are expected to stay at average to high levels, but with more volatility. Supply growth in ASF-affected markets, rising availability of dark meat after Russia’s and Ukraine’s entry to global markets, and the reopening of US chicken exports to China will all add to volatility in global trade flows.

Meat production in Ukraine (click for full resolution)

The top-performing markets in 2020 will be China, which is expected to see short supply in the next four to five years, and Mexico, where supply will also remain short, after outbreaks of avian influenza (AI) in early 2019. The US — and, to a lesser extent, the EU and Russia — will see improvement if supply stays balanced.

Several wildcards could impact markets in 2020, including Brexit, the ongoing risk of AI, feed-price volatility (the base-case scenario indicates limited growth), and potential trade disruptions. In trade, we see more openings in Asia (partly because of AI), but also rising restrictions in Africa and the Middle East.

Previously reported that poultry meat and edible poultry by-products export from Ukraine in the period of January–November 2019 reached 375.1 thou. t23% higher from the prior year's comparative period (303.89 thou. t).

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