The epoch of cheap (and poor-quality) meat products at the global market is probably over.
Nevertheless, in early autumn many countries faced the negative consequences of the so-called “transition period”: while the governments were thinking about changes in tax policies, the prices at the market of meat broke all the records…
How satisfied is the demand for meat in different countries of the world?
experts note the following:
· Kazakhstan is determined to develop its livestock sector. In particular, over 150B tenge is going to be invested in Karaganda region. Both the local and state authorities are sure that the introduction of innovative technologies to the agricultural sector will ensure the food safety of the region and the country on the whole.
· This year Ukraine has exceeded its meat plan by 6.3%, having produced about 1 million 775,4 thousand tons of meat. The production increase was provoked by the growing demand of European countries.
· Russia gradually increases its meat production as well despite having difficulty with fodder after the abnormal droughts. The Russian Minister of Agriculture Elena Skrynnik has recently sounded the planned figures: by the end of this year the meat production is expected to reach 10.6 million tons, which is 6.5% more than last year. The increase is possible due to the timely ban imposed by the government on the export of crops.
· Australia is currently experiencing cattle export problems after the Indonesian government reduced the imports of Australian meat and adopted a series of laws stimulating domestic livestock farming.
· Brazil gradually increases the total number of livestock as well. The current increase is 1.5%. Such a tendency has been seen over the last 3 years.
· China has managed to achieve the supply-and-demand balance and take measures to prevent the indirect intervention into the price-setting process, making the prices on pork and beef stable around the country. The transportation of agricultural products is duty-free while the farm enterprises enjoy privileged supplies of fuel and fertilizers. The Chinese authorities are currently having talks with Hong Kong about cold meat supplies.
· However China is unlikely to be able to compete with major suppliers of cold meat in the region – US and Australia – because of the growing domestic consumption.
Meat products are consumed by billions of people around the world. It is meat consumption that provides the human body with 15% of energy and 25% of protein needed. Meat foodstuffs provide the human body with many major mineral elements, which cannot be obtained through feeding on vegetable food. The growth of the world population and the growth of the developing economies lead to an increase in the global consumption of meat. Analysts expect that the net annual production of meat around the world will increase from 288 million tons up to 463 million tons by 2050. Consequently the total number of the global livestock will increase from 1.5 billion to 2.6 billion. Moreover, meat is the same strategic economic indicator as crops. The authorities of numerous countries around the world do their best to develop livestock farming, first of all for satisfying domestic needs.
Analytic forecasts: will there be an increase in the meat reserves?
Not every country can boast growing meat reserves. Masterforex-V analysts say that more countries around the world become worried about declining livestock and meat production.
1. In the US the production of pork has declined by 4%, veal by 2%. On Jan 18th 2011 at the forum of beef producers the main issues discussed will be the reasons for the production decline and the ways to combat it, including the creation of fodder supplies, foodstuff safety and the introduction of innovative technologies.
2. The National Pork association (NPA) reported bad news: the pork production in the Eurozone reduces by 4 % every year on average. The performed analysis have helped to determine the reasons for the production downtrend:
· Low prices on ready-made products
· High expenses on fodder
· Growing prices on energy carrier
· Strengthening /stability of national currencies
· Banks are not confident in the profitability of swine breeding
What will be the meat prices?
The problems that the developed countries have with supplying their population with fresh meat for the weekend are reflected on the screens of the visual displays at numerous commodity markets around the world confirming the thesis that life is getting more expensive.
Analysts for the Department of Market Sentiment Analysis, Masterforex-v Academy, remind you to pay attention to the fact that the price on livestock futures (LE) has suspended its growth at the historic high. The bar with low spread and high trading volume allows them to consider that the big-scale (major) market participants start taking profit around $107. Their actions are rather active, which leads to a decline down to $104. A strong upswing is usually followed by a decline or retracement. The depth of the correction is difficult to define in advance. It may reach $100 (the variant is marked with green arrows on the image below). However, the forthcoming New Year and Christmas holidays are expected to provide such a demand that the price will easily overcome $107, update the historic high at $109.2 (the red-arrow scenario) and then will start retracing. At this point traders should watch the price behavior around $107. In case the price gets over the level at signs of market strength, then one may look for an opportunity to enter the market at corrections. In this case the target area will be $114-116.2.
Livestock
Beef
Pork
Source: Market Leader
