The outlook for European poultry is “positive” but the industry has started to the feel “negative repercussions” of an unlimited flow of fresh chicken imports from Ukraine into the EU, according to a new report from Rabobank.
The bank’s latest research shows that Ukraine is benefitting from a free trade access agreement that the European Commission introduced in order to support the country in a time of war.
But the trade access agreement, which has proved unpopular with members of the Europe’s poultry meat sector group, Avec, has according to Rabobank had an impact on the price of chicken breast meat in the wholesale, food processing and foodservice market in Europe.
The bank’s latest Global Poultry Quarterly report highlights that high levels of fresh chicken imports are “creating pressure”.
It also details that protein supply is tight in Europe with poultry the only growing protein – Rabobank expects that prices will remain “relatively high”.
But relatively high consumer price inflation of 3% to 15% across Europe has influenced buying trends according to the latest report.
Consumers have switched from buying organic and slow growing breeds to standard chickens.
While falling feed prices may have helped push up production in Europe there has also been an increase in chicken imports – mainly driven from Ukraine which grew by 80% but there has also been a rise in imports from Brazil and Thailand.
Poland, the UK and Germany all saw production levels increase during quarter one while production fell back in France because of avian influenza (bird flu) concerns.
But overall there has been low production growth in Europe this year.
According to Rabobank bird flu will continue to “remain an important factor” that could suddenly impact global market but from a local supply perspective and a trade perspective.
But the industry is expected to “stay profitable” in Europe as feed costs are expected to drop further making poultry more affordable the bank stated.
Nan-Dirk Mulder, senior analyst – animal protein at Rabobank, said poultry should be able to “benefit from its relatively competitive pricing in many markets compared to other proteins like beef, pork, and alternative proteins”.