Eoin Kelly, Market Insight, Bord Bia – Irish Food Board
According to the latest Rabobank Quarterly Pork Report, the global pork industry will remain weak during quarter one 2016, with some seasonal improvement anticipated going into quarter two. Exchange rates are expected to play a more important role in global pork markets this year due to the expected strengthening of the US dollar with the Euro and Brazilian Real at present best equipped to take advantage of this.
Rabobank Outlook for global and regional markets:
In China, imports are expected to rise further, supported by strong domestic prices and an expected smaller herd in 2016, driven by stricter environmental regulations. The level of China’s imports and relative competitiveness of major exporters will be key to a global recovery.
In the US, industry expansion is expected to slow after a significant supply growth in 2015. Exports are expected to pick up, due to expected low prices and approval of plants for export to China.
In the EU, pork market recovery during the first weeks of 2016 is forecast to reverse in the coming weeks, after the suspension of the European Commission’s Private Storage scheme on 21 January. However it is hoped that a slowdown in supply in the second quarter of the year due to an anticipated decrease in the herd will help rebalance the trade.
In Russia, production is set to increase by over 7% this year continuing the strong growth from 2015. Production growth coupled with a recovery in the Russian rouble is expected to further pressure pork imports. In 2015 it is estimated that pork imports totalled around 450,000 tonnes representing a decline of 650,000 tonnes from the 1.1 million tonnes imported in 2012.
In Brazil, the market is forecast to follow the steady path of the final quarter of 2015 due to continuing good domestic and export demand. Anticipated weakening in the Brazilian real will also contribute to the competitiveness of exports.
In South East Asia, market conditions for pork were relatively balanced throughout 2015. Production growth was recorded in both the Philippines and Vietnam while favourable exchange rates kept food import prices lower and consumer purchasing power stable in 2015.
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