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Rabobank says pig prices will “bottom out” in the coming months

PW ReportersBy PW ReportersJanuary 28, 20162 Mins Read
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The global pork market will remain weak during the first quarter of 2016, followed by some partly-seasonal improvement leading into Q2, according to the latest pork quarterly report from Rabobank.

“Recent positive demand and price developments in importing countries will start to support prices in exporting countries during Q1,” said the bank’s animal protein analyst, Albert Vernooij (pictured above).

He also forecast that a modest development in demand will mean that Rabobank’s five-nation pig price index will “bottom out” in the coming months, albeit from its lowest point since 2006.

The bank is upbeat on trade prospects in relation to China, with a forecast that imports can be expected to “further increase”, supported by strong domestic prices, the further destocking of the herd this year and the impact of stricter environmental regulations.

For the US market, Rabobank’s comment is that industry expansion is expected to slow after near-record supply growth in 2015, enabling packers’ margins to remain strong due to limited available capacity.

As for the EU’s on/off use of private storage, however, Rabobank adds: “EU pork market recovery during the first weeks of 2016 will reverse in the coming weeks, after the suspension of the European Commission’s private storage scheme. Reopening the scheme will be critical for further market support.”

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