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AHDB Pig Market Weekly


27 February 2012

AHDB UK Market Survey - 24 February 2012AHDB UK Market Survey - 24 February 2012

The value of UK red meat exports increased by a quarter in 2011 as tight global supplies resulted in increased export volumes and higher unit prices.

AHDB

Increased value of trade in 2011

The total value of exports was £1,048 million, with beef exports accounting for £437 million, sheep meat exports £380 million and pig meat exports £231 million.

The value of beef exports represented an increase of 32 per cent on the year, as volumes increased by 29 per cent and the price two per cent. The increased volume was attributable to a shortage of beef across a number of markets on the continent resulting from increased exports to non-EU markets from these countries. The value of sheep meat exports was 19 per cent higher on the year. The export price increased seven per cent while volumes were 11 per cent higher. The increased volume was attributable to higher production and a shortage of product on the continent as a result of lower supplies from New Zealand. With tight supplies of lamb in most markets, there was increased competition for product resulting in record prices during 2011. In 2011, the value of pig meat exports was 19 per cent higher year on year as unit values increased two per cent and volumes were 15 per cent higher.


The market conditions which have led to an increase in export values have also resulted in the value of imports increasing. Tight supplies of product in key producing nations has generally resulted in lower supplies of red meat globally, which has limited import volumes for beef and sheep meat especially. The total value of imports in 2011 was five per cent higher year on year at £2,664 million. Beef imports accounted for £855 million, sheep meat imports £411 million and pig meat imports £1,399 million.

Despite beef imports falling one per cent in volume terms the value increased 11 per cent as a result of a 13 per cent increase in the import price. This increase in price was the result of considerably higher procurement costs, with farmgate prices in most countries rising in 2011. Similarly sheep meat imports fell 13 per cent as shortages in the majority of trading regions were apparent, these tight supplies resulted in substantially higher prices for sheep and as a result the import price increased 23 per cent on the year.

The total value of pig meat imports increased two per cent on the year as a six per cent increase in the price offset a four per cent decline in volume. There was variation between bacon and pork. Bacon import volumes were down 10 per cent, with the value six per cent lower. In contrast, as the volume of pork imports increased by two per cent and the price was seven per cent higher, the value of pork imports increased 10 per cent to £721 million.

Pig market trends



Prices

The recent decline in finished pig prices continued as the DAPP eased back further in week ended 18 February. At 139.52p per kg the DAPP was more than half a penny lower than in the previous week. The recent downward trend in the DAPP comes as consumer demand reportedly remains weak while supplies of finished pigs are still relatively high. Nevertheless, prices continue to be nearly five pence per kg higher than at the same stage last year.

Trade

UK imports of fresh and frozen pork in 2011 totalled 372,000 tonnes, an increase of over two per cent compared with 2010. Denmark reinforced its position as the largest supplier of pork to the UK, recording growth of 18 per cent on the year. It now accounts for nearly a third of pork imports. Despite a nine per cent fall in shipments, the Netherlands remains the second largest supplier. Imports from Germany increased by nine per cent to 53,000 tonnes compared with 2010.

The vast majority of these imports were made up of fresh pork, which accounted for almost 84 per cent of total imports. Fresh imports increased at the expense of frozen, which decreased by almost six per cent to 61,000 tonnes.

Imports of bacon were down 10 per cent to 280,000 tonnes. Shipments from the two main countries of origin, Denmark and the Netherlands, were down 15 and nine per cent respectively while product from Germany were up almost three per cent year on year.

Exports of fresh and frozen pork in 2011 increased 10 per cent on the year to total 144,000 tonnes. There was a decline in exports to all main European markets. However, this was more than offset by increased shipments to non- EU markets. The growth in exports to these markets was fuelled by a considerable increase in shipments to the Far East, notably Hong Kong and China.

In 2011, fresh and chilled exports accounted for 92,000 tonnes, or two thirds of total pork exports, an increase of just over one per cent compared with 2010. Frozen pork exports increased by 30 per cent to 52,000 tonnes and accounted for 36 per cent of the total exports.

Bacon exports in 2011 were up 39 per cent to total over 34,000 tonnes as exports to both Ireland and Denmark were significantly higher year on year.

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