The outlook for the global poultry industry in 2017 has been shaken by the bird flu situation, according to a Rabobank report.
The bird flu situation has significant implications, both locally and globally, according to RaboResearch’s Global Poultry Quarterly for the first quarter of 2017.
The Chinese market has been worst affected, due to a sharp increase in the number of human bird flu cases in the country, the report says.
It has dramatically changed Chinese market conditions, as prices have fallen sharply to historic lows.
Despite the spread of the disease across other parts of the world, including Europe, Africa, and the rest of Asia, most of these markets have continued to perform relatively well, it added.
With a high number of human cases of the disease in China, fears are rising over human-to-human cases with a risk of a pandemic, but no signs of such cases have been found so far, according to Rabobank.
The disease has had a huge economic impact, with live broiler prices falling by 50% compared to prices in the early part of the third quarter in 2016 and a slowdown in import growth, figures show.
Chinese consumers have moved away from wet markets, markets for selling fresh meat and produce, which usually sell over half of all poultry, according to RaboResearch Senior Animal Protein Analyst Nan-Dirk Mulder.
The global impact of avian influenza on trade is significant, with ongoing restrictions on trade from Europe and also still from the US.
“The recent Chinese human avian influenza cases dramatically turned Chinese market conditions, especially at wet markets, and this will indirectly reduce the appetite for poultry imports in the coming months.
“This will affect global markets for wings, feet, and legs. It will especially affect Brazil, which is a major exporter to China.
“Markets, including China, will gradually recover after the Northern Hemisphere winter season, when avian influenza pressure will likely be reduced,” Mulder said.
Markets with a Domestic Focus
Markets with a domestic focus are still performing well, including some markets with bird flu outbreaks, such as India, Russia, the EU and Ukraine, the report says.
Supply tends to be tight, and many markets are benefiting from lower feed costs, especially in Russia, Brazil, South Africa and India, it added.
The new global avian influenza crisis provides another wake-up call.
“It will force the industry and governments to further modernise business models, as the virus will remain endemic in wild bird populations.
“Optimal biosecurity, modern value chain and distribution models, and regionalisation will be key themes,” Mulder said.
