Weekly Product Updates

W14 Chicken Update: Optimistic Outlook for Global Poultry Market in 2024 Despite Avian Influenza Outbreak in the Philippines

Frozen Whole Chicken
Brazil
Published Apr 12, 2024
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In W14 in the chicken landscape, Rabobank forecasts a gradual recovery in the global poultry market for 2024, primarily propelled by emerging markets in Asia, the Middle East, Africa, and Latin America. The expected positive trend is anticipated to support a resurgence in demand for value-added poultry products and an uptick in demand from the food service sector. However, the poultry market faces challenges in maintaining market equilibrium, as well as logistical hurdles arising from geopolitical tensions and avian influenza outbreaks. Meanwhile, Brazil's chicken exports experienced a decline in Q1-2024 despite notable increases in purchases from Middle Eastern countries amid production uncertainties in the region. An outbreak of highly pathogenic H5N1 avian influenza was reported on a poultry farm in the Philippines, resulting in the death of 4,475 birds.

Global Poultry Market to Recovery in 2024

Rabobank expects a gradual recovery in the global poultry market in 2024, with a growth rate projected at 1.5% to 2%, primarily driven by emerging markets in Asia, the Middle East, Africa, and Latin America. However, Europe, the United States (US), and Japan are anticipated to experience sluggish growth. Improved conditions in domestic markets were observed in Q1-2024 following challenges such as oversupply and declining prices in the second half of 2023, attributed to production cuts aimed at rebalancing supply and addressing downward pressure on demand. The positive trend is expected to support a recovery in demand for value-added poultry products and an increase in demand from the food service sector. Price dynamics are expected to have a significant impact in 2024 but exert less influence compared to 2023 due to consumer price inflation and rising incomes.

However, the market faces challenges in maintaining market equilibrium amidst disciplined supply growth and logistical challenges stemming from geopolitical tensions in the Black Sea region, Red Sea attacks, and drought affecting water levels in the Panama Canal. These issues will likely lead to increased costs, delayed supply, and limited container availability. Avian influenza outbreaks pose another challenge, particularly affecting Southern Hemisphere countries like Brazil and Thailand, potentially disrupting global trade. Despite these obstacles, a gradual recovery in processed poultry trade is anticipated following a weak performance in 2023.

Brazil’s Chicken Exports Drop in Q1-24 but Optimistic in the Coming Months

The Brazilian Animal Protein Association (ABPA) reports that Brazil's total chicken exports, including fresh and processed products, amounted to 1.22 million metric tons (mmt), valued at USD 2.14 billion in Q1-24, a 7.2% decrease in volume and a 16.77% decline in value compared to Q1-23. Mar-24 shipments totaled 418.1 thousand metric tons (mt) valued at USD 751.3 million. Although the shipped volume in Mar-24 represents the highest recorded so far in 2024, it is 18.8% lower than the Mar-23 volume, while the value is 23.4% lower than the revenue registered in the corresponding month of 2023. Mar-23 shipments were considered abnormal as they exceeded 500 thousand mt, a historical record for Brazilian chicken meat exports.

The primary destinations for Mar-24 shipments were the United Arab Emirates (UAE) with 40.7 thousand mt (+16.2% YoY), China with 38.9 thousand mt (-48.9% YoY), and Saudi Arabia with 35 thousand mt (+3.9% YoY). ABPA highlights the increasing prominence of Middle Eastern countries in recent months, driven by substantial purchases amid production uncertainty in the region. Generally, the global market presents a balance between supply and demand, which should favor Brazilian exporters in the coming months, considering the resurgence of avian influenza in competing countries.

Avian Influenza Outbreak in the Philippines

The World Organization for Animal Health (WOAH) reported an outbreak of highly pathogenic H5N1 avian influenza on a poultry farm in the Philippines. The disease killed 4,475 birds out of a flock of 60,529 on a farm in the province of Leyte. It is suspected that free-flying wild birds could have transmitted the virus via their droppings. Notably, the affected farm is surrounded by rice field paddies and a river that is frequented by wild waterfowl.

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