GLOBAL – The pork industry is headed for another uncertain year in 2023 as animal diseases, feed grain prices, and Chinese policy all expected to adversely impact growth, a new report by Rabobank has highlighted.
According to the report, feed grain prices have eased off from their peak in the second quarter of 2022 but they are expected to fluctuate throughout the quarter in the U.S.
Labour costs are expected to increase hiking up production costs as well. While energy and freight costs are anticipated to lower.
The report also offers insights into the effect of diseases on the pork markets such as African Swine Fever (ASF), porcine reproductive and respiratory syndrome (PRRS), and porcine epidemic diarrhoea virus (PED).
The continued spread of ASF in Asia and Europe is predicted to factor into supply chains and trade, while PED remains a potential risk this year.
PRRS has been an issue in the US and Europe in 2022 but the rates of infection have been gradually dropping off.
Biosecurity should therefore be a priority in the global pork industry and Rabobank has noted the measures already put in place to improve global biosecurity.
On account of a short-term supply surge and weak demand that stemmed from high coronavirus infection rates, Rabobank is expecting volatility in China’s pork markets through Q1 2023. This comes after the country loosened its ZERO-COVID policy.
The slacking of the policy raises opportunities but also uncertainties, Rabobank notes in its Global Pork Quarterly report from January.
This is because China is the largest pork market in the world and the reopening of operations between the country and other nations will inevitably affect the global supply and demand balance.
The demand rates are predicted to be uneven throughout the quarter with importation expected to increase slightly in 2023 after a decrease of 45% in 2022.
In Japan, pork consumption has managed to remain steady and storage capacity will not allow for an increase in imports.
As for Vietnam and the Philippines, continued growth in their pork production is expected despite challenges such as inflation, ASF outbreaks and trade volatility.
The Vietnam economy has grown hence the demand for pork in the country has also increased.
The production rates are expected to increase as they did in 2022 by 11.4%. This growth in domestic supply has led to the rapid decline of imports.
Disease outbreaks have however affected the profitability of the pork supply chain resulting in small-scale farmers exiting the market.
Pork production in the Philippines has also seen a steady increase but so has importation to compete with as a consequence of the government’s extension of tariff reductions.
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