Strong demand and lower feed costs clash with trade uncertainties
The current state of the global pork market reflects a landscape shaped by both favorable economic conditions and looming geopolitical challenges.
A new report from RaboResearch highlights that while the industry enjoys reduced feed costs and strong demand, it faces potential disruptions from geopolitical tensions and trade disputes.
Chenjun Pan of RaboResearch details the stakes involved, stating, "A suspension of EU exports or high tariffs could mean global pork trade flows are rerouted as China finds new origins and EU exports flow to other regions." This quote underscores the delicate balance markets must maintain in the face of political and economic turbulence.
The reduction in feed costs has been a boon for pork producers, enabling expansion and increased profitability. This is particularly notable in regions like the EU and the US, where pork supply is expected to rise slightly thanks to improved farming practices and herd recoveries.
The backdrop of ongoing trade disputes, such as the US-China trade war and China’s recent antidumping probe into EU pork, injects a layer of uncertainty. These events could reshape trade routes and market dynamics, necessitating adjustments in both exporting and importing countries.
Governments are increasingly focused on enhancing domestic pork production to reduce dependence on unpredictable global markets. This move towards self-sufficiency aims to shield local industries from international disruptions and foster more stable market conditions.
As 2024 progresses, the global pork industry will have to continually adapt to the interplay of favorable economic trends and challenging geopolitical realities, striving to maintain stability and growth in an unpredictable environment.