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EU pig prices slump as coronavirus slows China import demand

Alistair DriverBy Alistair DriverFebruary 13, 20202 Mins Read
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EU pig prices are continuing to fall and as import demand from China cools, due in part to the coronavirus crisis gripping the country.

In the four weeks ending February 2, EU pig prices fell by over €10 (approx £8.40) to average €182.54/100kg (approx 153p/kg).

AHDB analyst Duncan Wyatt suggested this was largely due to a fall in demand from China, which for a long time has underpinned strong EU prices, due to a combination of stocks being released from storage and the impact of the coronavirus crisis.

“In late October, the Chinese government intervened to reduce wholesale pork prices. This involved releasing government stocks and encouraging imports. Reports suggest that this led to high volumes of pork in commercial store, which made moving volumes difficult,” he said.

“Import demand in the run-up to Chinese New Year was therefore dampened, influenced by these logistical difficulties,” he said.

“After the holiday period, it was thought Chinese import demand would pick up again. However, the coronavirus outbreak led to an extended holiday period. Logistical difficulties, including temporary restrictions imposed on transporting meat between provinces, have reportedly delayed the delivery of imports.”

But he stressed that strong underlying market fundamentals remain. “In fact, Rabobank now expect Chinese pork production to fall more sharply this year, as coronavirus delays restocking efforts. However, in the short-term, demand for imports could be negatively affected,” he added.

“Industry reports suggest pork demand, particularly out of the home, could be reduced. This may affect EU pig prices for some weeks. Although, in the latest week alone, prices were actually stable.”

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Meanwhile, the UK reference price gained €2.35 during the period, to €192.04/100kg (approx 160p/kg). This is largely due to some strengthening of the pound against the euro, Mr Wyatt said.

The premium that UK prices now carry to the EU average continues to widen. For the week ended 2 February, it stood at €9.50 (about 8p/kg), compared UK prices being discounted by nearly €3 (2.5p/kg)four weeks before

Selected individual EU nations recorded price changes as follows over the four weeks:

  • Denmark              +€6.39
  • Spain:                    -€6.37
  • Poland:                 -€10.66
  • Germany:            -€11.65
  • Belgium:              -€13.00
  • France:                 -€17.00
  • Netherlands:      -€19.89

 

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Alistair Driver

Editor Pig World, group editor Agronomist and Arable Farmer and Farm Contractor. National Pig Association webmaster. Former political editor at Farmers Guardian. Occasional media pundit. Brought up on a Leicestershire farm. Works from a shed in his Oxfordshire garden.

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