International prices of meat followed a mixed pattern in 1997: prices of cow beef recovered from the very low levels they had fallen to in the aftermath of the BSE-scare in 1996, failing, however, to recoup the loss fully. Prices for high quality beef, however, remained subdued. Sheep meat prices, which reached a record high in 1996 because of short supplies combined with strong demand, started to weaken in the second half of 1997 to remain, on average, close to or slightly above the previous year’s level. Similarly, international prices of pig meat products were under moderate upward pressure in 1997 as reduced exportable supplies coincided with sluggish import demand. By contrast, prices of poultry meat products fell, reflecting slowing growth in import markets and keen competition among exporters, with chicken leg quarter prices sliding to their lowest level since 1993. Although, overall, there was little upward pressure on international meat prices in 1997, the strengthening of the US dollar meant, for many countries, higher trading prices when converted into domestic currencies.
World meat production and consumption rose by three percent in 1997, to 223 million tons. Production in the developed economies dropped marginally, with a sizeable contraction of the livestock sector in the CIS not fully offset by production increases in North America and Oceania. In the developing countries, meat production rose in all regions, although there was a noticeable slackening in the rate of expansion in Asia, particularly China.
International trade in meat (excluding trade in live animals
and trade among EC and CIS member countries) increased by four percent
to 14 million tons in carcass weight equivalent, with poultry and bovine
meat providing all the thrust. The CIS was confirmed as the most important
destination for meat traders, a position it had gained in 1996 after displacing
Japan as the major importer. The United States shipped over a quarter of
global meat exports in 1997, well above the EC which has seen its share
of the international meat market dwindle since 1995.
| 1995 | 1996 | 1997
estim. |
|
| ( . . . . million tonnes . . . . ) | |||
| WORLD TOTAL | 208.5 | 217.0 | 223.4 |
| Poultry meat | 54.9 | 58.1 | 62.3 |
| Pig meat | 83.2 | 87.1 | 88.6 |
| Bovine meat | 56.0 | 56.8 | 57.1 |
| Sheep meat and | |||
| goat meat | 10.6 | 11.0 | 11.4 |
| Other meat | 3.9 | 4.0 | 3.9 |
| DEVELOPING COUNTRIES | 107.8 | 116.1 | 122.9 |
| Poultry meat | 26.9 | 29.2 | 32.6 |
| Pig meat | 47.0 | 51.2 | 53.3 |
| Bovine meat | 24.6 | 25.8 | 26.6 |
| Sheep meat and | |||
| goat meat | 7.0 | 7.5 | 8.0 |
| Other meat | 2.3 | 2.4 | 2.4 |
| DEVELOPED COUNTRIES | 100.7 | 100.9 | 100.5 |
| Poultry meat | 28.0 | 28.9 | 29.7 |
| Pig meat | 36.2 | 35.9 | 35.4 |
| Bovine meat | 31.4 | 31.0 | 30.5 |
| Sheep meat and | |||
| goat meat | 3.6 | 3.5 | 3.4 |
| Other meat | 1.6 | 1.6 | 1.6 |
Growth in global poultry meat production accelerated from 6 to 7 percent in 1997, with output rising to 62 million tonnes. This increase was fostered by a reduction in feed costs which, in many countries, compensated for falling poultry producer prices. All regions recorded growth, except the CIS where the sector’s performance continued to be negative. Among the largest producers, China maintained a double digit rate of expansion, reflecting improved poultry-to-feed price relation-ships.
International trade in poultry meat products reached 5.8
million tons, 8 percent more than in 1996. The principal destination was
the CIS where larger imports were made to cover production shortfalls and
meet dynamic domestic demand. Purchases by China also surged, with the
bulk consisting of cheap poultry cuts. Other major growth markets in 1997
included Argentina, Canada and Mexico. By contrast, imports by Japan remained
at a standstill, reflecting depressed demand, while those by Saudi Arabia
fell in parallel with the rise in domestic output. On the export side,
Brazil, China, Thailand and the United States raised sales while EC exports
to third countries were smaller, reflecting mainly a contraction in non-subsidized
sales.
| 1995 | 1996 | 1997
estim. |
|
| ( . . . thousand tonnes . . . ) | |||
| WORLD | 12 493 | 13 482 | 13 957 |
| Poultry meat | 4 539 | 5 390 | 5 807 |
| Pig meat | 2 311 | 2 558 | 2 395 |
| Bovine meat | 4 743 | 4 628 | 4 843 |
| Sheep meat and | |||
| goat meat | 654 | 660 | 667 |
| Other meat | 246 | 246 | 246 |
World pig meat production, at 89 million tons, rose by some two percent in 1997, substantially less than the five to six percent growth recorded in recent years. Various factors contributed to this slow-down, including a slackening in the rate of expansion in China and disease problems, in particular swine fever in several EC member countries and foot-and-mouth disease (FMD) in the Chinese Province of Taiwan, which resulted in massive slaughtering of animals. In many other instances, high feed prices caused a down-sizing in breeding herds in 1996, limiting the potential for expansion in 1997.
World trade in pig meat contracted by close to six percent
in 1997 to 2.4 million tons, constrained by a reduction in supplies in
major exporting countries, which coincided with depressed import demand.
The FMD outbreak in the Chinese Province of Taiwan, in particular, was
immediately followed by a ban on its exports. Similarly, the incidence
of swine fever in various EC member countries lifted domestic prices and
reduced the Community’s ability to sell without subisidies to third markets.
The decline in global pig meat imports was mainly a reflection of a sharp
contraction in purchases by Japan, despite the lowering of the minimum
entry price in July, and by the CIS. These declines were compensated only
partially by increased imports by Mexico, the Republic of Korea and Bulgaria.
| 1995 | 1996 | 1997 | |
| ( . . . . . US$/tonne . . . . . ) | |||
| Chicken parts 1/ | 922 | 978 | 858 5/ |
| Fresh, frozen pork 1/ | 2 470 | 2 733 | 2 864 5/ |
| Manufacture cow beef 2/ | 1 947 | 1 741 | 1 860 |
| Frozen mutton 3/ | 1 371 | 1 457 | 1 490 6/ |
| Lamb frozen whole carcass 4/ | 2 621 | 3 295 | 3 399 7/ |
Global bovine meat production rose by less than one percent to 57 million tons in 1997. Production in China continued to expand at over 10 percent per year, boosted by dynamic domestic demand. Output was also larger in the Republic of Korea, where the sector entered a liquidation phase in response to falling prices, and in Australia, where drought conditions resulted in increased slaughtering. Production in the United States was almost unchanged. By contrast, there was a further substantial contraction in the CIS, where cattle opening inventories in 1997 were 9 percent lower. Production also fell in the EC, following the introduction, in recent years, of various schemes to limit surpluses. With much reduced cattle inventory following drought problems in 1995 and 1996, Argentina also recorded a fall in production. The same tendency was apparent in Brazil, where herds were cut in the last two years as improved economic conditions have reduced the benefit of holding cattle as a hedge against inflation.
International trade in bovine meat increased by more than
five percent to 4.8 million tons, after the decline recorded in 1996 when
various health scares depressed demand. Imports by the United States rose,
stimulated by higher domestic prices. Purchases by Japan recovered from
the depressed 1996 level, while deliveries to CIS countries expanded to
compensate for dwindling production. In Latin America and the Caribbean,
strong domestic demand boosted imports especially in Brazil, Chile and
Mexico. The increase in global trade was sustained by larger exports from
Australia, Canada, New Zealand and Uruguay. By contrast, sales from Argentina
and Brazil declined in line with output.
Global sheep meat production in 1997 reached 11.4 million tons in 1997, three percent more than in the previous year, reflecting a large expansion in the developing countries. Growth was particularly marked in China and Pakistan, where the sector was boosted by strong domestic demand. In Africa, growth was underpinned by increased slaughtering in Morocco, following serious drought problems, and in Nigeria. Output also rose in Australia after several years of uninterrupted declines, reflecting a larger lamb crop. By contrast, production dropped in New Zealand, owing mainly to reduced mutton output. Production was also down in the EC and fell significantly in the CIS.
Global trade in sheep meat, at 630 000 tons, was up marginally
in 1997. Larger imports were made by the United States, to offset the decline
in output, and by the CIS. A small increase was also recorded in the EC.
By contrast, purchases by Japan and Saudi Arabia diminished. Exports by
Australia recovered after several years of contraction, which more than
compensated a fall in deliveries by New Zealand.
Global meat production is anticipated to expand vigorously in 1998, driven by continued low feed prices which should boost the poultry and pig meat sectors. Sheep meat production should also rise in line with increased herds. By contrast, little growth in bovine meat output is forecast, as many important producers will enter a herd rebuilding phase that will limit slaughtering. Region-wise, a large expansion is forecast in North America, especially in the United States, where pig and poultry meat production are anticipated to reach new highs. By contrast, a down-sizing of the livestock sector is again forecast in the CIS, in the light of poor producer returns and strong competition from imports. In the developing countries, sustained output growth is anticipated in all regions. However, several Asian countries, including Indonesia, Malaysia and the Philippines, that meet most of their domestic requirements through local production, may record some decline under the combined effects of higher input costs following the currency devaluation and depressed demand for meat. In several instances this fall will be associated with sharp reductions in live animal imports. By contrast, Thailand could take advantage of the its improved competitiveness on foreign markets to step up poultry meat production for export.
International trade in meat is forecast to rise by four to five percent this year, driven by growth in poultry and, in particular, pig meat flows. By contrast, trade in both sheep and bovine meat might remain steady around the 1997 level, constrained by limited export availability. Purchases by the CIS, which have become of critical importance to the international meat markets, are forecast to record another sharp increase to compensate the decline in output and to meet rising demand. Imports of meat by countries in the Far East have been revised downward in the light of the sharp currency devaluation and lower income growth prospects in a number of countries in the region. Under the new economic background, purchases of meat, especially beef, by the Republic of Korea, Japan and the Philippines are anticipated to contract compared with last year. However, since supplies are likely to be diverted to other markets, for instance in the Near East, North America and in the CIS, the overall impact of the Asian financial crisis on global meat trade should be rather limited. The expansion in global meat exports in 1998 should be sustained by growing shipments from North America, South American and Asia. In the latter region, the currency devaluation is forecast to give an additional boost to sales to foreign markets, especially of poultry from Thailand.
The Asian crisis has also modified the original expectations
for international meat prices in 1998: poultry meat prices were forecast
to fall in line with developments in the feed markets. This outlook is
not expected to be altered by the current financial crisis in Asia, despite
an expected contraction in imports by the Asian economies affected. Indeed,
it is probable that exporting countries will cut poultry output rather
than having the excess supply diverted to other markets, which would have
depressed prices further. The early forecast for international pig meat
prices was for a substantial fall, reflecting expectations for ample export
supplies relative to import demand. The Asian crisis paradoxically may
limit such a drop, especially as it may induce an increase in pig meat
purchases by Japan, the world’s second largest importer and the highest
price market. This could occur because, under the system of minimum import
prices in place in the country, a devaluation would not trigger an increase
in import prices expressed in the local currency, while local pigmeat producers
would be confronted with higher input costs, limiting their ability to
compete with foreign suppliers. However, this outcome is still subject
to a large degree of uncertainty. According to earlier assessments, bovine
meat prices were anticipated to rise compared with last year, reflecting
a rather tight market situation due to relatively short export supplies.
In the new situation, much reduced deliveries to Asian countries affected
by the crisis may reverse this original forecast, with prices possibly
falling below the 1997 levels. This impact will be aggravated if exporter
expectations are for a continuation of the crisis in the region, which
might induce them to delay the herd rebuilding process, resulting in additional
supplies being placed on the market. International mutton and lamb prices
are anticipated to remain steady around the relatively high 1997 level,
even though ample meat supplies world-wide might exert some indirect downward
pressure on them. The crisis in the Asian region is unlikely to alter this
outlook to a significant extent.