Pork exports bans imposed as a result of Germany’s African swine fever (ASF) outbreak will have ‘serious ramifications’ throughout the EU supply chain, according to Thames Valley Cambac.
In its latest market update, TVC observes that there is already an increasing amount of EU materiel being offered at reduced prices, which will be ‘aggravated even further’ by the arrival of ASF in Germany and subsequent export bans from China and elsewhere.
“Given that Germany is the third largest supplier delivering circa 13-14% of all imported pork products to China, this ban will undoubtedly have some serious ramifications throughout the pork supply chain across Europe until the merry-go-round of exporting sorts itself out,” TVC said.
“German product will have to remain in the EU now under the regionalisation regulations, the ban on export resulted in an immediate price reduction of 20 euro cents per/kg, which now puts the German price at €1.27, equating to just over 117p sterling. The gulf in price emphasises again the significant importance of that export market.
“In the meantime it is envisaged that Spain will be a significant benefactor as China will look to replace the lost German supply, which will further aggravate the huge shortage China has as a consequence of their own issues with ASF.”
Meanwhile, in the UK, further disruption at UK pork plants resulting in short kills continue to ‘plague the industry’, TVC said.
Last Monday, protestors blockaded Pilgrim’s (formerly Tulip) Ashton plant, which resulted in a days’ lost kill, while many other processors have also been disabled through reduced staff numbers, primarily in butchery, restricting the numbers that can be processed.
“Some have put Saturday kills on to try and move some of the backlog but this is only being done as demand from China has thankfully started to gather some momentum again,” TVC said.
Prices are under increasing pressure as oversupply due to full kills not being achieved. The SPP fell by 1.27p, the biggest fall in one week for the SPP since the end of January 2018.
However, the sow price actually increased by around 2p/p/kg all due to exchange rate which ended the week at 92.40p, up 3.08.
The weaner and store market remains extremely thin outside of contracted supplies. There are also some concerns getting muted from finishers that the feed prices looking forward are stronger than anticipated a few weeks ago aggravating an already lacklustre demand.
European Prices (p/kg.dwt) w/c 13/09/20 Movement on last week
European Av. 133.68 + 0.25
Belgium 112.52 – 0.17
Denmark 129.66 – 0.14
France 146.94 + 1.36
Germany 131.31 – 0.21
Ireland 145.38 – 0.23
Holland 119.16 + 1.42
Spain 150.78 – 0.24
(Ref Weekly Tribune)