UTRECHT, Netherlands – Rabobank’s recently released Q3 report on the global poultry market reflects the possible impact of trade disputes between the United States and key export markets. The analysis by the Rabobank showed volatility in feed costs due to safeguarding measures on Brazilian poultry by China and rising trade tensions with the US and China as significant features in the world outlook.

“Global trade has recently become highly volatile, and we have seen some major movements in trade streams and prices due to several important factors,” said Nan-Dirk Mulder, senior analyst for animal protein at RaboResearch. The report also cited Saudi Arabia implementing new halal standards, which led to a 30 percent drop in imports in the first quarter. China is taking on several poultry issues starting with Brazil. The Chinese government issued a safeguard on imports of Brazilian poultry, which led to implementing company-specific import levies. Rabobank believes this will impact import volumes of Brazil poultry into China.

With the recent US threat of tariffs on goods, China announced a set of import taxes on US agricultural products, including soybeans, starting in July. Negotiations continue, but if the tariffs are implemented Chinese feed prices will rise. Rabobank believes traders will then begin sourcing soybeans from Brazil, which is already suffering from a weak poultry industry.
Directly linked to the US-Chinese trade tensions is the implementation of a 25 percent tariff on US chicken imports into China, further delaying the prospect of US chicken accessing the market.

On June 5, Mexico’s president, Enrique Peña Nieto, signed a decree placing import tariffs on US steel and agricultural products including pork in retaliation for the US tariffs on Mexican steel and aluminum products a few days before that. Rabobank believes this will indirectly impact the North American poultry markets where prices in Mexico for pork and chicken will likely rise. The group says its outlook is positive for the Mexican chicken industry and will result in a “more bullish market environment” for import of poultry. Source: http://www.meatpoultry.com/articles/news_

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