EU pigmeat export expansion to continue but at a “slower pace”

EU pigmeat exports could continue to expand in 2016 but at a slower pace, due to increased competition and product availabilities in the US and Brazil, according to the latest “short term outlook” from the European Commission (EC).

The all-sector report, which runs to 28 pages, also concludes that as Russia is continuously encouraging its domestic pork production, and because of the economic situation, EU exports towards this destination are “not expected to resume significantly even if the sanitary and economic import ban were to be lifted”.

In looking at the pigmeat sector so far in 2015, based on all available figures up to September 15 this year, the report notes that despite decreasing pigmeat prices, the lag in the adjustment of pig production meant that EU slaughterings continued to go up in the second quarter of 2015, compared to 2014.

“The most remarkable growth was recorded in Spain (+9.1% or 265,000 tonnes in first half of 2015) based on a strong increase of breeding sows (+5% or 105,000 head),” it is stated. “Higher production was also recorded in Denmark, Germany, the Netherlands, Poland, Belgium, France and the United Kingdom.”

It is also stated that, as a consequence of the below average pigmeat prices, the “first signs of a decline in the reproductive herd can be seen”.

One potential bright spot in the report, from a production perspective, concerns the potential for increased sales into China.

“According to a recent publication from Rabobank, China might need to import an extra 600,000 tonnes in 2015 because of its shrinking pig numbers,” it is stated, alongside the comment that “back yard farming seems to be pushed out while larger scale farms remain in business”.

“This could be an opportunity for EU exports to China. Nevertheless, in the past, in similar situations, domestic prices went up limiting consumption and the growth in imports. In addition, a close eye should be kept on the euro/yuan exchange rate and the consequences of the financial crisis on Chinese consumer demand and its meat sector.”

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