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Complex European pork market needs Russian ban solution says Scots economist

PW ReportersBy PW ReportersOctober 6, 20142 Mins Read
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Pig price movements over the past year highlight the complexity of the European pork market, in which trading dynamics between the UK and Europe have changed significantly, says Quality Meat Scotland’s Head of Economics, Stuart Ashworth.

Commenting as part of an overview assessment of current pig production, prices and prospects. Mr Ashworth (pictured) makes a particularly strong point on the market impact of the year’s two Russian import bans, stressing that it is important that this issue is “resolved timeously”. 

“Restrictions imposed by Russia in late January, and reinforced by the August announcement, resulted in the loss of a market for almost 2% of European pigmeat production and a quarter of all EU pigmeat exports,” he said.  “Although some of this trade has been replaced by sales to Asian countries, which are short of American pigmeat, some has been left on the European market squeezing producer prices as a result.” 

The Russian ban, he added, appeared to have had a particular effect on the EU market in the third quarter of 2014, given that exports to Russia have peaked around this time in recent years.  In contrast to August 2013, therefore, when producer prices “spiked across most of Europe”, they had merely “levelled” in August this year.

In addition, looking at performance and prices earlier in the year, he added that the Russian effect was also a major factor in “significantly” changing the trade dynamic between the UK and Europe. 

“Having been hit by the ban on pigmeat imports imposed by Russia in the spring,” said Mr Ashworth, “the average European prime pig price has fallen 22%, in sterling terms, from this time last year.  As a consequence, UK prices have moved from broad parity with the European average a year ago, to a premium of around 20% today.”

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