The global poultrymeat market outlook has taken a bearish turn in the first quarter of 2014, with sharp grain price shocks and changes to global trade patterns blamed.

Turmoil in the Ukraine and concern over the emerging El Nino weather pattern have led to “abrupt increases in feed prices”, some 10-15% higher than earlier expectations. This, alongside weak global trading, is threatening previously buoyant prospects for poultrymeat, according to the latest Rabobank Poultry Quarterly report.

It points to pending anti-dumping duties on European chicken in South Africa (its biggest export market) and a new temporary free-trade agreement granting Ukraine quotas for importing poultrymeat to the EU as threats to trade balance.

See also Rabobank’s previous report

These challenges come during a traditionally weak season for poultrymeat, on the back of strong production growth across the EU for the first three quarters of 2013, though this fell back slightly in Q4. The report says supply discipline will be necessary to offset this market pressure.

“The effect on companies hinges on their regional market balance and longer-term forward hedging,” said Rabobank analyst Nan-Dirk Mulder. “A slowdown in global trade volumes and lower product prices, especially for leg quarters, will affect companies in international trade and lead to shifts in global trade streams.”

Despite this warning, UK poultrymeat production dropped slightly in the final quarter of last year, according to Rabobank and, as Poultry World reports this month, a temporary shortage of day-old chicks to place in sheds will likely tighten the market when demand picks up closer to the summer.

There are other potentially bullish factors for British chicken prices. A 7% drop in non-EU imports is supporting white-meat pricing, according to the report, and a “buy local” trend that began during the horsemeat scandal in early 2013 shows no sign of abating.