Interview with Dr Carmelo Ferlito

Director – Petersime Southeast Asia Sdn Bhd

Q1. How do you foresee the development of the livestock industry for the rest of 2021?

Despite the optimism that was emerging at the end of 2020, I think that it is now clear that 2021 is still a challenging year, and in some regions the scenario may remain weak also in 2022 (Southeast Asia). At macroeconomic level there are three main elements of uncertainty:

  1. Supply chain constraints are still an issue, and they contribute to keep raw material prices at high levels.
  2. We still need few months to get a clear picture about the vaccination efficacy and the power of new variants; at this regard, vaccination is also proceeding at different speeds in different part of the worlds.
  3. Southeast Asia is facing the first truly strong COVID-19 wave and, despite the experience gained in 1.5 years, countries like Malaysia, Thailand and Indonesia are relying exclusively on ineffective measures such as stay-at-home orders. This is going to strongly impact negatively this part of the world.

I would add a forth element of uncertainty: inflation. Pressures from the supply side have stressed production prices, while expansive fiscal and monetary policies (made necessary by the lockdowns) are accelerating the transferring of that inflationary tendencies on consumer prices. In different parts of the world, the situation may become “hot” when the COVID crisis is over and deflationary tendencies are no more at play. When central banks will have to tighten credit, then a new economic crisis may arise, frustrating – at different extents – the economic recoveries worldwide.

Given this scenario, I believe it is important to think about the livestock markets at regional level, as I believe that the pace will be very much different according to different parts of the world.

With regard to Asia, I think that only China and Philippines will show sign of recovery, while the more general recovery will be driven by the West world, which is ahead on the vaccination rollout and on the way out from movement restrictions. Southeast Asia, where hotels and restaurants are closed even for domestic consumption, will experience further troubles.

It is likely that beef will preserve the positive momentum for a while, followed by pork and chicken, but a true industry rebound is not really conceivable as far as international movement restrictions are in place.

Q2. Where are the potential growth sectors in the livestock industry moving forward?

In analysis by country, I think we will have, with reference to Asia and excluding China, two big lungs: former Indochina and the three populous countries – Indonesia, Pakistan and Bangladesh.

Still remaining in Asia, I think that in the post-COVID world, beyond the continuous growth for poultry (in the whole region) and for pork (in Vietnam and China), we may see a growing interest for cattle farming. The current good price momentum may drive investors eyes and countries like Malaysia, where there is still availability of soil (despite a complex legal framework), may reserve some interesting surprise.

Q3. Can you give us some insight on the current trends and happenings in Southeast Asia’s Poultry sector?

The industry is under stress. With the arrival of a strong wave of COVID-19, policies that were conceived and expected to be temporary have now become the norm, in particular because they appeal to the ruling class. In Malaysia alone, it has been estimated that at least 120 hotels closed down for good. These are businesses which will not come back, whose meat demand is lost. F&B outlets – or at least those which still survive – have reduced their business by 80%; in many areas, with the closures of schools and offices, restaurants customers are gone. Policymakers have been very made in their trade-off analyses and the consequences of their decisions will weigh on the food industry for long.

Don’t get me wrong, the Asian market will come back to be protagonist and to be the main driver of the poultry market growth. The margin for growth in countries such as Indonesia, Bangladesh and Pakistan are enormous. But it will take time for these markets to come back to play a dominant role. And we need to add the political struggle in Myanmar.

In the short-term, in Southeast Asia I think that we will see a good – or descent – poultry market only in the Philippines, followed by Indonesia (but depending on how long the new lockdown will last and if Jokowi will come back to its original policy trend).

In the post-COVID world, those tendencies which emerged in the pre-pandemic world will come back, and in particular I see a very good potential in the former Indochina market, led by Vietnam.

Indonesia, Pakistan and Bangladesh have the power of big numbers, but their growth will be linked to their more general economic potential (and, of course, on the reopening of international borders, the real conditio sine qua non for a true economic recovery).

Interview with Ian Alexander Ross

Tarsus Southeast Asia

Q. How do you foresee the progress & development of the livestock events industry for the rest of 2022?

As we left the peak of the pandemic’s second wave in Southeast Asia around Q3 2021, positive undertones emerged for the exhibitions industry in general across the region. VIV MEA led the way forward in nearby Middle East with the regional event concluding the latest edition successfully during the month of November 2021, followed strongly by the IPPE Atlanta show in quick succession held recently in January 2022 in the US.

With Southeast Asia adopting a more conservative approach in terms of international travel, face to face meetings & exposure to C19 in general than Europe and America, it was natural to expect events to only pick up gradually at the onset of 2022, thus we are now seeing great strides and progress in this recovery in countries such as Thailand, who opened up international travel with the streamlined exemption from quarantine system effective 1st February and with Vietnam, who will commence full re-opening of borders by March 15th.  Cambodia also has already opened up for international quarantine free travel since January and the Philippines also boosted confidence recently with the announcement of opening for fully vaccinated travellers.
In addition, Malaysia is looking at opening up international travel from March 1st onwards with neighbour Singapore aiming to allow quarantine-free travel for all vaccinated visitors after omicron subsides.

As China’s supplier market across majority of the industries plays an vital role in the international exhibition field especially in Southeast Asia, outlook is now very positive as once the national quarantine requirements upon travellers return to China have been relaxed, we should see strong participations once again as expected by the 3rd Quarter of 2022.

In conclusion, 2022 and early 2023 looks very promising for the events industry as important key branding exercises, reconnection with existing and new customers and showcasing of new technologies is imperative for companies to increase profitability and ensure long term sustainability across value chains. Event players who already had strong online based communities, existing digital formats in place and exporting supplier clients who were expanding their regional foothold, developed some interesting digital, hybrid & online formats of business meetings and webinars, however as is the general consensus in the trade fair industry, nothing beats face to face business events and physical shows because that’s where the actual magic happens, making it a format that can never be replaced.