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AHDB Pork Weekly Export Bulletin


29 April 2013

BPEX Weekly Export Bulletin - Week 17BPEX Weekly Export Bulletin - Week 17

In March, some £1.46m of British pork (excluding offal) was sold to China, putting us in 8th position of exporters. Ireland is also doing well, with exports of £840,000. We are not doing so well with breeding pigs, 2,200 gilts and boars were imported from the USA in the first quarter, 995 from France, 641 from Denmark, 572 from Canada but none from the UK. Chinese total pork imports were down 10% in the first quarter and a decline is predicted for the whole of 2013.
British Pig Executive Weekly Export Bulletin

Articles promoting British pork and pig genetics are to be published in Profisvine (Russia) and CAAA bulletin (China).

Denmark

Rabobank Predicts Higher Pork Prices

A new Rabobank report predicts higher pork prices in the EU during the second half of 2013. These positive predictions are based on a forecast sharp decline in EU pig meat production as the year progresses, combined with anticipated firmer demand from China. In recent years, stronger export demand has driven prices higher during the second half of the year. The report suggests that Russian import restrictions, economic crises in the EU and higher retail prices for pork all had a negative impact on demand in the year to date. Poor weather has suppressed barbecue demand and sales were disappointing during the Easter period. (Source, Markedsnyt for Svinekoed).

Tulip Launches Oven Bacon

A consumer survey shows that the residual fat left in the pan when frying bacon is the largest negative for Danish consumers when cooking bacon at home. Therefore, Tulip has developed a new type of bacon - extremely thin slices that can be crispy baked in the oven instead of frying. (Source, Landbrugsavisen).

Markets

There is still plenty of meat in Europe and sales are reported as stable for all cuts. The market for backs in the UK is also unchanged at similar prices. On third country markets, there is some emerging interest from Russia while demand from the Japanese market is stable. The Chinese market is still weak with prices easing accordingly.

Danish Slaughterhouses - Payments Week Commencing 22 April 2013

France

Mr Le Foll Behind VPF

On 15 April Mr Le Foll, the French Minister of Agriculture, clearly supported increasing French pig production in order to avoid abattoir closures, as happened recently with Doux in the poultry sector. Two million pigs have been lost since 2010. The French government has no available funds to support prices in the industry. Mr Le Foll is expecting French retailers to take this role. Finally, he suggested a review of the specifications of the VPF logo before the summer in order to communicate clear messages to consumers about the main criteria regarding:

- Social issue
- Sanitary status
- Origin
- Quality

Gad

According to Christophe Peter, Managing Director of Gad, the company is operating below capacity at both sites. With potential capacity of 28,000 pigs, the Lampaul site is only processing 21,000 pigs per week. At their main site in Josselin, capacity is 42,000 pigs but the group currently only processes 26,000 pigs per week through the plant.

Cooperl Retail Offensive

The French pig producers’ cooperative has launched a new butchery concept called Aurélien (the buchers’ patron saint) in Redon, Brittany. The modern shop expects 50% of turnover to come from butchery products, 30% from elaborated products and 20% from snacks and rotisserie. Cooperl bought the butchery chain Défi Viandes in the Northeast in 2011. (Source, Porc Magazine)

Image Meater Now Ready

The CBS automatic classification equipment uses visual analysis for the calculation of meat content and is now operational in 13 abattoirs under Uniporc control. The new system gives a very good statistical result mirroring the CGM penetrometer results. (Source, Porc Magazine)

Markets

Pigs: The European market was low last week due to a very slow demand. In France and across all of Europe, especially in the north, everybody is waiting for sunnier weather and higher temperatures that will prompt demand and consumption of barbecue meats.

Piglets: In France, prices are firm, as is the case in Great Britain and Denmark. Prices in France continue to trend higher than the same period last year or 2011.

Pork Prices RUNGIS Week Commencing 22 April 2013

Germany

Rising Pressure on German Pig Price

Early this week available slaughter pigs were sold without problems. However, as the week has progressed pig supplies have increased and are now exceeding demand. Operators also report large stocks in cold storage and an ongoing lack of export demand, especially in southern Germany. Furthermore, next week is a short four day week which will result in even higher pig numbers. Even some producers agree that the pork market needs zest and lower prices may be difficult to avoid.

Pork Prices Hamburg Market Week Commencing 22 April 2013

Netherlands

Bullish Market

Vion increased their quote by €0.02 to €1.71 last week following German prices; a pause in the price rise is expected (see above). Meanwhile, Rabobank (see above) predicts a rise in world pork price for the second half of the year, lead by increased Chinese imports. In the first half, traders should expect a stable situation with supply and demand more or less in balance. (Source, Boerderij Vandaag)

Vion in Trouble

The vastly indebted group plans to sell its huge and highly profitable ingredient business. The company is expected to take a hit of £500m due to the massive disinvestment. (Source, Reuters)

Spain

Russian Headache

After the wholesale delisting of Spanish plants (see past bulletins), some abattoirs have been re-listed. In 2012, Spain exported 65,000 tonnes of pork, offal and fats worth €155m to Russia. (Source, Mercolleida)

Pork Prices Barcelona Market Week Commencing 22 April 2013

Bulgaria

Poor Outcome

The European Commission is scathing with regards to application of the EU-funded measures against Classical Swine Fever (CSF). The audit report mentions the failure to list small pig holdings and pig movements, poor control of wild boar population and biosecurity on farms and lack of adequate resources for laboratory testing. (Source, EC)

Russia

Canadian Import Restrictions

Canadian Pork International reports Rosselkhoznadzor has reduced the number of Canadian companies approved for export to Russia from 60 to 18. At the beginning of April, Rosselkhoznadzor officers complained about the quality of certification by Canadian exporters. Only companies inspected by Rosselkhoznadzor and approved to produce ractopamine-free meat will be allowed to supply products to the Russian market. (Source, firstnews.ru)

USA

Return to profitability?

US producers may return to profitability according to Chris Hurt of Purdue University. Pork price prospects are boosted by the USDA Grain Stock report that shows a surprising high inventory and the recent fall of maize and soy. A return to breakeven will be welcome as producers have suffered three quarters of losses. Thus, modest profits could unfold in the third quarter. (Source, Agra Europe)

Australia

Australia Expects Higher Imports

A report from "Australian Bureau of Agricultural and Resource Economics and Sciences” (ABARES) predicts that Australian pork imports will rise from 142,000 tonnes in 2011/12 to 152,000 tonnes in 2012/13 and by a further 9% in 2013/14. Higher volumes are partially attributed to the competitive Danish price compared with Australian prices. Per capita pork consumption in Australia over the last 10 years has increased by 20% to 25kg. By 2017/18, consumption is predicted to increase further to 27kg. Australian domestic production of pork is expected to decline by 2% to 340,000 tonnes in 2013/14. However, by 2017/18 production it is anticipated to rise to around 360,000 tonnes (Source, Markedsnyt for Svinekoed).

China

Chinese Pork Prices Could Be on the Up

Economist Sun Chi, from the Daiwa Investment Group, predicts that Chinese pork prices will increase dramatically. Low pork prices in China have led to a decline in the Chinese pig population. Falling by 14.8m head in January and 8.5m in February, the population is between 450 and 480 million pigs. If the population continues to decline at this rate supplies will be tight on the Chinese market in 6 to 9 months, driving prices higher. The Chinese authorities' decision to purchase pork for storage may limit future price increases but not prevent them. (Source, Markedsnyt for Svinekoed).

Mystery Uncovered

Were there 6,000, 10,000 or 16,000 pigs floating in the Huangu River into Shanghai? Whatever the number, overcrowding on farms appears to be the main factor. Farmers have been struggling with diminishing land and increased pig numbers. The number of pigs in Jiaxing, a city west of Shanghai is now 7.5 million and authorities want to cut it to 2 million. In the town of Xinfeng, the number of pigs has risen to 15.3 pigs per mu (667sqm), three times the level recommended by the authorities. Disease and mortality are rising constantly and have reached 30% in some cases with circovirus blamed. In an effort to cut pig numbers, Jiaxing officials have cut the land available to pig farmers, thus aggravating the problem. Some farmers have stopped producing and pocketed the subsidy but transferred the pigs on to remaining farms. Two more factors must also be considered: it is more difficult for criminals to sell pork from dead pigs on the black market and the current low pork prices are not helping. (Source, Reuters, various)

Chinese Wholesale Prices Week Commencing 22 April 2013

Vietnam

More Pig Disease

A new strain of foot and mouth disease (FMD) with a type A virus has emerged in the provinces of Ha Tinh and Thanh Hoa, in central Vietnam. Currently there is no suitable vaccine for this strain. Department of Animal Health Deputy Director, Dam Xuan Thanh said Thailand has embarked on research to produce a vaccine for this strain of FMD. He added that the blue ear epidemic has spread in several Northern provinces, causing the price for pork to fall. (Source, Asian Agri-biz)

Losses are Mounting

Pork production in Vietnam’s southern province of Dong Nai, the largest pig raising area in the country, is under serious threat of bankruptcy as farms are incurring huge losses as pigs are traded at around £1.20 per kg live weight while the production costs is about £1.30 per kg. High production costs are attributed to a heavy reliance on imported raw materials. In addition, the state imposes a 5% value-added tax on animal feed. Local farmers also have difficulty in accessing loans at local banks. Those eligible to borrow from banks have to pay a high interest rate, which drives the production costs even higher. (Source Asian Agri-biz)

South Africa

The Processed Meat Market in South Africa (Source, Mintel)

Small but growing market
The processed pork market was totalled 168,000 tonnes in 2011. It is experiencing a rate of growth of 3.4% per year. Like other food commodities in South Africa, it is affected by high food inflation. The market is dominated by frozen products (52%), ahead of chilled (42%) and canned (6%).

Strong brands
Own label products represent only 18% of the market. Strong brands like Irvin & Johnson (13.4% market share), Heinz (13.2%), Tiger (11.4%), Bull (4.7%), Rainbow (4.4%), Astral (4.3%), Eskort (4.1%) and Fry (3.8%) dominate. The quality and value of the product remain generally low. However, Woolworths has a sophisticated range, under its own label, including quality cooked and dry cured ham and salami. Other retailers like Shoprite and Pick & Pay have also improved their range of processed meat in their more affluent stores.

Opportunities
Gammon was the product most in demand from South African retailers during our 2012 visit. Sausages are also sought. BPEX and EBLEX will be present at the IFEA show 18-20 September and processed pork product will be on display alongside pork, lamb and beef and offal.

April 2013

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