Expect modest recovery for pork
RABOBANK is forecasting a modest recovery in the pork market in the second half of 2012.
In its latest Pork Quarterly report, Rabobank said it expected stable, slightly pressured global hog prices in Q2 2012.
The report said the success of the grilling season in the northern hemisphere and prospects for Asian imports would be the key determining market factors moving through 2012.
"Producers will need to monitor crop production developments remaining in a no-margin-for-error feed supply situation," it said.
"Global hog prices have softened in recent weeks to the extent that the Chinese government announced in late April that it has initiated procurement for its frozen pork reserves."
However, hog prices are still high by historical standards in order to offset high feed costs.
"With Chinese hog prices projected to rebound at the end of the year, the prospects remain positive, with supply discipline in the key export markets essential to support elevated price levels."
Rabobank said its view was that in the longer term, growth in global meat protein consumption would continue to lag income and population growth in important emerging markets, raising volume risks to processors and price risks to buyers, from processors to consumers.