More uncertainty lies ahead for the global pork market, according to Rabobank, which has revised down pork production for 2020 in major producing countries, predicting volatile global trading conditions in the short term.
The multinational banking and financial services company has said that impact of the Covid-19 pandemic on global pork supply chains is expected to be long-lasting. Challenges in production, processing, trading, and consumption could jointly reshape the industry.
Chenjun Pan, senior analyst of animal protein at Rabobank said: “Labor shortages, operational suspensions, soft demand, and channel shifting will force industry players to increase automation, adopt digitalization, improve plant working conditions, streamline processing, and integrate along the supply chain to optimize operations and secure margins.”
The report shows that short term challenges such as the rising geopolitical tensions, unsettled regional negotiations, and Covid-19 will weigh on the outlook for global pork supply, generating volatile global trading conditions. The Rabobank Five-Nation Hog Price Index has dropped in 2020.
In addition, in China, imports are slowing down, as the new wave of Covid-19 cases in Beijing in June triggered strict inspections of global sourcing and bans on a number of exporters. In Europe EU-27+UK pork production is expected to decline 0.5% in 2020. US prices are under pressure, as limited shackle space and ample inventories continue to weigh on the market. In Brazil, exports in the first half of the year were 37% higher, in contrast to the soft local demand, which is dragging down production.