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2023

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China's Protein Consumption Boost in 2023

Source:

AHDB

Fitch Ratings predicts that the reopening of China’s food-service sector following the Covid-19 pandemic will boost protein consumption in 2023.

Fitch Ratings predicts that the reopening of China's food-service sector following the Covid-19 pandemic will boost protein consumption in 2023. However, the credit profiles of domestic protein companies, particularly hog breeders, will depend on sustained cost improvements and market supply rationalization.

 

The rebound in catering services should drive the consumption of major proteins, with the food-services sector accounting for a significant portion of poultry and pork demand before the pandemic. This increased demand should lead to a recovery in hog prices and reduce breeders' profit volatility, but the short- to medium-term hog price will still depend on market supply discipline and restocking sentiment.

 

Poultry prices had a positive trend in 2022 due to limited and rational supply, as well as a shift in consumers’ preference for poultry products given the high hog prices in 2020 and the first half of 2021. It is expected that the consumption recovery in 2023 will support poultry prices, but the price direction may differ based on the type of bird.