The global pigmeat situation

Transcription

1 The global pigmeat situation New perspectives Wim Thus Rabobank

2 What is Rabobank International? Rabobank is the largest financial services provider in the Netherlands Rabobank is an AAA rated financial institution Rabobank has a food & agri focus outside the Netherlands Rabobank has a global network of dedicated research professionals Food & Agribusiness Research and Advisory

3 Contents Section 1 Section 2 Section 3 Section 3 Impact of the financial crisis Developments in the global pork industry Lessons to be learned from the crisis Pork in China

4 Impact of the financial crisis Section 1 4

5 What s the impact of the crisis on the industry? Weak and shifting meat demand Low level of capital investments Difficult financing of working capital and international trade Volatility risks: -Exchange rates -Commodity prices 5

6 Historic trends have shown that long term impact on meat demand is low Global animal protein consumption 160, , ,000 First oil crisis Second oil crisis US savings/ loan crisis Asia/Russia crisis Global financiall crisis Only short term global impact on global meat demand 100,000 80,000 Seafood is the most sensitive animal protein industry for economic downturn 60,000 40,000 20,000 Poultry is the least vulnerable industry for economic downturn Bovine Meat Pigmeat Poultry Meat Mutton & Goat Meat Eggs Seafood

7 Financial crisis drove down grains and oilseeds prices but signs are turning 700 Prices of Prices grains of grains and oilseeds & (USD/tonne) (USD/MT) /01/ /03/ /05/ /07/ /09/ /11/ /01/ /03/ /05/ /07/ /09/ /11/ /01/ /03/ /05/ /07/ /09/ /11/ /01/ /03/ /05/ /07/ /09/ /11/ /01/ /03/ /05/ /07/ /09/ /11/ /01/ /03/ /05/ /07/ /09/ /11/ /01/ /03/ /05/ /07/ /09/ /11/ /01/ /03/ /05/ /07/ /09/ /11/ /01/ /03/ /05/ /07/ /09/ /11/ /01/2009 EU millimg wheat US wheat US corn EU corn US soybean US soybean meal EU feed wheat 7

8 Drop in global meat trade Global meat trade growth Y-on-Y

9 Developments in the global pork industry Section 2 9

10 50% more meat demand in next 20 years Global Global meat demand 450,000, ,000, ,000, ,000, % +23% 34% Tonnes 250,000, ,000, ,000, ,000,000 21% +34% +29% 30% 40% 39% 39% 50,000, % 25% 23% Beef Pork Poultry Sheep meat Source: Rabobank based on FAPRI, FAO, USDA, EC, OECD 10

11 China drives global growth in meat demand Global pork consumption Source: Fapri, 2009 Food & Agribusiness Research and Advisory

12 China and Brazil only countries with growing production in coming years Global pork production Source: Fapri, 2009 Food & Agribusiness Research and Advisory

13 Global pork trade Who will be the winners? 13

14 Lessons to be learned Section 3 14

15 Winners in current market situation Demand focus Operational excellence Strong financials

16 Pork in China Section 4 16

17 Modernization and scale increasing in Chinese pork industry China: Pig farm size breakdown by year Source: Ministry of Agriculture, Rabobank estimate China: Pig processing Source: Ministry of Agriculture, Rabobank estimate 100% 90% 80% 70% 60% 5% 7% 10% 12% 21% 36% 48% 53% 60% 50% 40% 50% 40% 30% 20% 10% 74% 57% 42% 35% 30% 20% 10% % E 2011E 1 ~ ~ ~ 0% Hand slaughtering Half mechanized slaughtering Mechanized slaughtering 17

18 Will China be able to produce enough pork to supply the growing demand in the coming decades? Feed availability (due to volatile commodity prices) Water availability Modernization sector both primary and processing Food safety Animal diseases 18

19 Conclusion Financial crisis has strong short term impact on meat industry Long term potential remains and China is expected to take more then 80% of future growth in the global pork industry Winners have good opportunities to improve position in recovery time Key challenge for China is to supply future meat demand growth with current limitations in feed and water supply

20 Thank you for your attention The financial link in the global food chain 20 Food & Agribusiness Research and Advisory