The UK pork market looks set to remain firm for some months to come according to a new forecast from AHDB Pork. That’s despite an acceptance by the organisation that its conclusion has been reached in the face of considerable Brexit-based uncertainty and the existence of some “contradictory” census data from Defra.
On balance, AHDB Pork believes pigmeat supplies on the domestic market will tighten further into 2017, at least until the latter part of the year, with this reduction in product ensuring that the UK pig market remains firm.
“As always, though, the direction of prices will depend on factors such as consumer demand and the state of the economy,” it stated. “Uncertainty around Brexit may also have an influence, beyond just the exchange rate.”
Defra’s December 2015 and June 2016 surveys, which both showed a rise in sow numbers, plus the fact that imports and exports aren’t behaving exactly as expected, are given considerable AHDB Pork attention on the way to delivering its upbeat conclusion.
On whether or not sow numbers are rising as falling, AHDB Pork focuses on late 2015 and early 2016 sow slaughter figures and reduced compound feed sales as indicators of what it believes is actually happening.
On imports and exports, meanwhile, it comments that with EU prices moving above UK ones, aided by the weak pound, UK pork should be more competitive at home and abroad. This, in turn, would be expected to lead to lower imports and higher exports.
“However, to date, that hasn’t really been apparent,” it stated. “UK pork exports have been rising, but lower production has limited supplies available for export.
“Imports, however, have started to increase, largely due to a sharp rise in Danish shipments since May, the reason for which is currently unclear. Although trade hasn’t realigned yet, it seems reasonable to assume that it will do so over time, if the pound remains weak.”
Hence AHDB Pork’s comment that it was “balancing” a number of factors in arriving at its “firm market” forecast for 2017.