CHINESE MARKET TO LEAD CONTINUED STRONG GLOBAL DEMAND FOR BEEF
Rabobank has published a new report on the global beef industry, forecasting continued strong market fundamentals and continued strong global demand led by the Chinese market.
In the report, Rabobank’s Food & Agribusiness Research team says that beef market fundamentals remain positive, with prices driven up across the globe in Q1 2014 by firm demand as well as further tightening supply due to drought-induced herd retention in the U.S. and adverse weather conditions in Brazil and Australia – the three main beef exporters. Combined with fluctuating exchange rates, these events have impacted competitive positions in export markets, with Brazil and Australia gaining export share in Q1 at the expense of the U.S..
The bank says that, on the demand side, beef demand growth will continue to come mainly from China. Although 2014 imports in China are not expected to reach the growth levels experienced in 2013, they will grow as Chinese farmers take little interest in government-supported production expansion and strong profits, and the market opening for Australian chilled fresh beef products. Chinese market opening to Brazilian beef may happen imminently.
“Prospects for the global beef industry remains positive in Q2, with further possible upside due to continuing pressured beef supply and scarce supply of competing proteins which will continue to impact competitive positions,” explained Rabobank analyst Albert Vernooij. “Brazilian cattle prices and exports have surged to record levels, and Australian droughts have encouraged historically high slaughter levels to meet global demand.”
Source: Rabobank