Euro exchange rate helping UK pig prices

UK pig prices are continuing to benefit from firm prices across Europe – which are, on average, 5% higher than 12 months ago – as well as advantageous exchange rates, according to the head of economics services at Quality Meat Scotland, Stuart Ashworth.

“UK prices quoted in euros have been impacted by currency exchange rate movements and prices are just over 2% higher than 12 months ago,” he said. “This means that the competitiveness of imported European pigmeat on the UK market is reduced, while UK exports to mainland Europe are more attractive.”

And latest trade data suggest that exports of UK pork were more than 20% higher than last year with growth in sales to both the EU and Asia. Imports of pork were marginally up, but imports of bacon and ham were more than 10% down.

“Higher prices across Europe have been aided by tighter supply,” said Mr Ashworth. “The December census showed a European sow population decline of 4% and this is leading to a tighter supply of prime pigs.

“In May, the EU slaughtered 2% fewer pigs than it did in the same month last year. The current forecast is that pigmeat production across Europe will be 4% lower over the second half of 2013 than it was last year.”

Another factor currently helping the European market is the politics of international trade.

“Russia has restricted pigmeat imports from the US, Canada and Brazil over concerns about the use of growth promoters,” said Mr Ashworth. “This has created greater demand from Russia for European pigmeat and, at the same time, demand from China and Hong Kong continues to grow.

“Notwithstanding the speed with which the politics of international trade can change, the continued tightness of European pig supplies are likely to underpin prices for some time yet.”

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