The EU pork market will improve seasonally during the rest of 2014 but will not reach the highs experienced in most other countries according to the latest quarterly report from the Netherlands-based Rabobank.
While forecasting buoyant prospects for the global market in general for the remainder of the year, Rabobank’s view of the EU pork industry is that the “rather disappointing” last six months will improve only to a limited extent going forward.
The bank’s advice for EU farmers and processors, in fact, is not to expect prices to reach the levels seen in the last two years, despite all that’s going on elsewhere in the world.
“Lower-than-expected pork prices will limit the urgently needed lower feedcost-induced margin increase for both farmers and processors in the EU,” said Rabobank. “Margins will still be positive, but the upside will be lower than hoped for.”
However, the bank’s analyst, Albert Vernooij, added that a significant shift on EU/Russian trade issues could change everything, given that Russia, Ukraine and Belarus accounted for 32% of EU pork exports in 2013 .
“The Russian import ban remains a deciding factor for EU price levels,” he said. “In addition the importance of exports to central and eastern European countries for the total carcass valuation, in combination with the high value of the Euro will limit the seasonal increase of EU pork prices. However, if the pork trade between EU and Russia partially or totally reopens, it would give a positive boost to EU pork prices.”