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AHDB Pork Weekly Export Bulletin


22 April 2013

BPEX Weekly Export Bulletin - Week 16BPEX Weekly Export Bulletin - Week 16

It is a rare occurrence when a major export deal is unveiled in the press. So, it is well done to Cranswick for announcing a £7m pork coup in Australia in the Grocer. A group of twelve Korean veterinarians and technical staff made a short visit to the UK to review traceability and controls for the pig and cattle sectors. This visit comes after another Korean visit last month by a film crew to produce a documentary on British pork provenance and safety. The group was accompanied by Dong Gwan Kang, a government official. With lighter supplies this year and the expected seasonal price rise, we can safely forecast an increase of EU pork wholesale prices over the summer. However, it is not proven that they will reach the €1.90 achieved last October.
British Pig Executive Weekly Export Bulletin

Denmark

Record Turnover for Danbred

The Danish breeder registered a record turnover for 2012 at €200m (+8%). The largest market is Germany, followed by Russia. Shipments to Russia accounted for 20% of total exports and showed the fastest growth. (Source, Boerderij Vandaag)

Tulip Expands Factory in Germany

Tulip’s plant at Oldenburg in northern Germany is going to be expanded. The expansion of 1,000 square metres is for a new bacon department which should be operational by October. The expansion is taking place to keep up with the demand for bacon on international markets. (Source, Danish Crown)

Export Licence to Russia

The Danish Meat Company's new slaughterhouse in Vraa has ambitions to secure exports of Danish pig meat to Russia. The slaughterhouse is waiting for an export licence for the Russian market. Backing the new slaughterhouse is Russian-born owner, Sergei Medvedev, who already owns other food production operations including delicatessens. (Source, JyllandsPosten)

Danish Crown UK Shipping Agreement

The shipping company DFDS has signed a major agreement with Danish Crown. The agreement means the company will sail from Esbjerg to England with 6,500 reefer containers annually. The agreement safeguards the Esbjerg-Harwich route. (Source, Esbjerg)

Markets

There is still plenty of meat on European markets and,although spring is on the way in central Europe, sales remained steady for all cuts. Sales of backs on the UK market were stable. On third country markets, there has been some interest on the Russian market. The Japanese market is unchanged and the Chinese market remained weak with lower prices.

Danish Slaughterhouses - Payments Week Commencing 15 April 2013

France

Chitterling Sausages

The famous “andouillette” is not everyone’s favourite meal. This French delicacy is made from the pig's digestive organs (veal, beef and sometimes even lamb can sometimes also be incorporated). The stomach and intestine products are carefully washed, cut, seasoned and marinated before being cased to create a thick whitish sausage. Some people don’t like the smell or taste of the final product. So Bigard and Charcuterie du Don have launched a new Toulouse sausage including 20% of “andouillette” components in the mix, hoping that the balanced taste will attract new consumers. The same concept has been applied to another delicacy - the “Andouille” - which is exclusively made of pork digestive organs: intestines (80%) and stomach (17%). There are several versions. The famous Guémené version is made by hand, as the layers of intestines need to be rolled carefully to produce a large uneven dark sausage. To soften the taste, manufacturer Andouillerie du Château, has launched a modern version for aperitif with the middle of the sausage made of cured pork belly surrounded with several layers of Andouille.

Summer Sausages

In the summer, the grilling sausage market is restricted to Toulouse and chipolatas with a 48.3% market share. This is followed by Merguez with 25.2%, pork stuffing 21.5% and finally a mix of offers accounting for 5% of the market. Sales are closely linked to the weather and the trend for this summer is mini versions of grilling products (sausages and brochettes) and longer shelf life, especially for brochettes. The Plancha cooking fashion is still rapidly growing. Interestingly, there are new plancha products in the poultry and duck ranges but nothing yet for pork ranges.

Markets

Pigs: The 56TMP price lost €0.012 last Monday at Plérin. Supplies are more than sufficient in the face of subdued demand.

Piglets: The market is stable and prices are firm. FNP-FNVBV prices lost €0.03 for 25kg and €0.49 for 8kg piglets. Supplies are currently limited while orders are increasing.

Cuts: French consumption has been low since the beginning of the year. “FranceAgriMer” said purchases of French Pork by households decreased by 2.9% between 31 December 2012 and 24 March 2013 compared with the same period last year. Purchases for loins were 4% lower while purchases of other cuts increased by 3.6%.

Pork Prices RUNGIS Week Commencing 15 April 2013

Germany

Waiting for the Sun

Following a satisfactory Easter period, the pork trade is quiet. Operators are waiting for the weather to warm up and the barbecues to be lit to rekindle demand. (Source, own)

Pork Prices Hamburg Market Week Commencing 15 April 2013

Belgium

Protest Against Price Stunts

Some sixty Belgian pig farmers protested in Sint Niklaas and Roesenlare against excessive price discount of 30 to 40% of pork prices by some supermarkets. They want an alternative pricing system based on cost of production. (Source, Boerdeij Vandaag)

Sweden

Pork in Halal Sausage

A potential new meat scandal has started up in Sweden,food authorities have found 10% pork in a Halal-labeled salami. The salami is produced in Slovenia and sold by a company in Gothenburg. It is not clarified if the company in Gothenburg imported the sausage directly from Slovenia, or whether it was bought through another company in Sweden. (Source, Ritzau)

Spain

Pork Prices Barcelona Market Week Commencing 15 April 2013

Netherlands

The Tussle Between Van Rooi and Vion keep Prices up

The battle between the two main players is adding pressure on the market which is already showing signs of steady rise. (Source, Boerderij Vandaag)

Ireland

The government subsidy programme to convert from stalls and tethers to loose sows has been extended to the end of September to allow stragglers to join. (Source, Irish Farmers’ Journal)

PRRS Outbreak

A PRRS outbreak has been detected in the largest Irish AI centre in Callanrun by Hermitage. Some commercial farms are implicated too. Pig semen is now imported from Britain. (Source, Irish Farmers’ Journal)

Ukraine

Lower Pork Production

According to the State Statistics Service, Ukrainian fresh pork production in the January to March period fell by 1.5% to 46,900 tonnes. The fall in frozen production was more marked, decreasing by 30% to 2,500 tons. (Source, PigUa.info)

Higher Prices Forecast

On 20 March 2013, the Ukraine banned imports of Brazilian pork following numerous cases of noncompliance with the Ukrainian veterinary and sanitary standards. According to Ukrainian market experts, this may result in higher prices of some pork products on the domestic market. The major share of Brazilian pork was purchased by processing companies producing pork sausages for lower priced market segments. Price increases of up to 20% are predicted. The Ukrainian importers dispute the import ban based on the country of origin as some Brazilian producers supplied pork of very high quality. (Source, Novostiukrainy.ru)

Russia

Wholesale Prices Decrease

According to the National Meat Association, the average wholesale prices for pigs and pork have decreased by between 20 and 30%, depending on the region, since Russia became a WTO member in August last year. Sergey Yushin, the Head of the Association, says the average wholesale liveweight price for pork decreased during the period from US$2.84 per kg in August 2012 to US$1.89 per kg by March 2013. The prices for half-carcases decreased from US$4.42 per kg to US$2.9 per kg over the same period. At the same time, retail prices only fell by 2 to 3% during the same period. (Source, kommersant.ru)

USA

COOL Regulations but Hot Tempers

Tempers are fraying in the consultation on the Country of Origin legislation (COOL). Among others, the National Pork Producers’ Council (NPPC) opposes the proposal on four grounds. It fails WTO measure and the USA would risk retaliatory measures that would endanger pork exports. It is of “doubtful benefit to consumers”. It threatens the growing supply chain integration in NAFTA. Finally, it will cost US$2.5b to implement and US$215m annually. (Source, NPPC)

China

Avian Flu Crisis may have Pork Implications

The latest outbreak of avian flu that has caused 14 fatalities since March, all near Shanghai, is a major cause of concern and sales of chicken products have plummeted. The government has been more open with the World Health Organisation and is dealing with the outbreak more swiftly and decisively by bird culling and suspending live sales. Until a decree of 2003, local authorities covered up disease outbreaks in order to protect their economies and reputations. It was only in 2007 and 2008 that legislation was introduced to end the ban on unauthorised media coverage and freedom of non-secret information with local authorities. Still, practices are different and local rules still prevail. Some thirteen people were recently jailed for “spreading” information on the disease. This crisis comes just as the dumping of thousands of dead pigs near the town is still fresh in the memories (see past bulletins). The government has still not said what killed the pigs although avian flu seems excluded. Also a pork butcher was the second fatality, not reassuring news. (Source, The Economist, Caijin Magazine)

The French Pork Sector Targets China

As part of a larger trade development initiative, the French pork sector aims to develop a premium farm to fork approach. It will be interesting to see if SIAL, taking place next month, will demonstrate the commercial will and investment to reach this goal. The French have been successful in developing Rungis-style wholesale markets called Marchés Hyperion in China in co-venture with Chinese interests with the first one in Nanning now fully operational and further ones in development in Tianjin, Changsha and Luizhou. (Source, Agra Europe, Rungis)

Storage Policy for Pig Meat

Declining prices and poor production economics for Chinese pig producers has resulted in the Chinese authorities initiating a purchase and storage programme for pig meat in more than 20 provinces. A ratio of 6, between pig price feed prices, is considered a pain threshold that requires action, the ratio has been below this threshold for more than four weeks. The authorities warn that the current oversupply of pig meat may continue and pig producers should adapt their breeding stock to prevent further losses. (Source, Markedsnyt for Svinekoed, BOACL)

Chinese Wholesale Prices Week Commencing 15 April 2013

India: Pork and Cereals Update

Reform of Food Aid will Affect Grain Prices

Some 840m people representing 67% of the population of India benefit from state food aid. Around 62m tonnes of rice and wheat are distributed through the 500,000 ration shops of the Public Distribution System (PDS). The main issue has been that 40.4% of the aid does not reach the intended people through corruption, pilferage or inefficiencies, labelled under the gentle euphemism of ‘leakage’. This is down from 54.1% in 2004-2005. The central government will still maintain the central pool and allocate it to depots in each state. States will be responsible for the allocation. The government intends to have less than 25% ‘leakage’ in the future. Still, the system supports grain prices for farmers in India through minimum prices and the very large public stocks. These, in turn, contribute to high world grain prices. Grain price inflation topped 17% in 2012 in India. The new system will be computerised and hopefully bring more transparency. In the future, cash transfers are expected to replace grain subsidies and ration cards and the revised scheme makes room for this more efficient help. A pilot project has started in six states. In the medium term, lower grain prices are expected in India. (Source, New Delhi Sunday Business Standard, our comments)

Pork Situation: Good Prospects but Difficulties Ahead

Pork production in India remains unorganised and localised with the North East and the coastal South (eg Goa, Mangalore) the main regions of production and consumption. It is estimated that around 20m people eat pork, mainly Christians and Chinese minorities. Production stands at around 350,000 tonnes only for the whole country with a rate of growth of 5-10% per year although there are no clear statistics. For instance, many Naga people in the North East keep backyard pigs. Unsurprisingly, production conditions, end product quality and availability are poor (see below). Fresh pork consumption is restricted due to the lack of organised trade and cold chain. Hence, salty, shelf-stable bacon and dry/smoked spicy sausages such as the chouris pão in Goa dominate the offer. Imported canned pork is increasingly available in stores. The great chance for pork is the development of a middle class now numbering some 170m people, who are keen to increase their meat consumption. Hindus represent 80.5% of the population and the great majority of them eat small amounts of meat. However, pork consumption is not likely to develop in the North West where the proportion of Muslims is highest. It is also in need of major investment with public-private partnerships the most likely way forward. Finally, meat prices are rising fast (14% in 2012 against 2011) confirming that demand is outstripping supplies but higher prices could deter buyers. (Source, own)

Pork Production Must Step up

Despite the efforts of India’s Pig Research Centre in Guwahati and the increasing interest of the livestock departments of leading universities, the performance of Indian pork production remains very poor. Starting with nutrition, pigs are not fed grain or processed feedstuff and FCR is around 4.0. Sows only wean six piglets on average per year with nine born alive. The lean meat content of carcases varies from 35 to 40%. Parent and Grand-Parent selection is inexistent. The last British pigs were imported in Kerala in 1994 and British breeds still dominate the stock. Canadian pure bred pigs were imported recently as the country aims to develop its pork production and has laid plans to improve pig breeding. (Source, own)

April 2013

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