The latest short-term outlook from the European Commission (EC) shows pigmeat exports to China are expected to reach a record 2.7 million tonnes this year, according to a summary produced by AHDB Pork.
At the same time, however, currency and economy issues affecting China going forward are forecast to result in a slight fall back in EU exports in 2017. As a result, the report includes the warning that the current level of export volumes to China should not be “taken for granted”.
For the moment, however, the report concludes that Chinese demand has helped support EU pig prices, which have been on the rise since April this year. The industry has also been buoyed by generally low feed prices, particularly for soya, although these have firmed a little of late.
Looking forward, pigmeat production in the EU is expected to slow in the second half of the year, as the sow herd has been declining, leading to reduced piglet availability. Overall, this is anticipated to leave pigmeat production for 2016 up only slightly on the year (1%), at 23.6 million tonnes. Production is then forecast to fall back slightly in 2017.
The report’s warning that current export volumes to China should not be taken for granted in the medium term is based heavily on the future behaviour of euro/yuan exchange rates and the current slowdown in the Chinese economy, each of which could ultimately “threaten to depress trade”. Total exports are, therefore, forecast to fall back slightly in 2017.