The slide in global pork prices will reach its nadir in the first three
months of 2016, finding 10-year lows, Rabobank said,
"Sufficient supply and modest demand development mean the
Rabobank five-nation hog price index will bottom out in the coming months, at
the lowest point since 2006, after a stronger-than-expected drop at the end of
2015," the bank said.
Rabobank saw prices beginning to recover toward April 2016.
"Recent positive demand and price developments in importing
countries will start to support prices in exporting countries," said Rabobank.
Chinese demand to
Chinese imports were forecast to increase, while Russian
Exports from Brazil and the US were expected to pick up,
with EU supply discipline dependent on whether a storage scheme is re-opened to
The Chinese pork supply will "stabilise, or even decline"
this year, Rabobank said, leading to rising imports.
"The level of China's imports and relative competitiveness
of major exporters is a major dynamic in 2016," Rabobank said.
Sow and hog inventories remain at a six year low, after a
massive cull as the industry was restructured, with smaller players closing
"While larger companies will continue to expand, this
additional volume—due to both capacity and productivity—is not expected to
offset the decline in supply caused by departing farms," Rabobank said.
"This suggests that China may further increase pork imports in
2016, following a strong rise in 2015."
Gains for US exporters will be limited, due the strength of
the dollar, but Rabobank expects European exports to China to rise this year.
But supply from the EU could be limited by the so-called private
storage scheme run by the European Commission.
The scheme saw 90,000 tonnes of pork put into storage
between opening at the start of the year, and being suspended on January 21.
A final decision on the scheme will be made on February 4.
"Reopening of the scheme will be critical for further market
support," Rabobank said.
The Russian pork industry will continue its "relentless
growth", Rabobank said, pressuring imports.
After a 5% increase in pork production in 2015, Rabobank
said production would rise by 7.5% this year.
Rabobank said imports, which have already fallen by 650,000
tonnes to just 420,000 tonnes between 2012 and 2015, would come under further
Russia is also likely to see a recovery in the value of the
rouble, which will likely pressure import prices, Rabobank said.