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AHDB Pork Weekly Export Bulletin


23 June 2014

BPEX Export Bulletin - Week 25BPEX Export Bulletin - Week 25

The 20th World Meat Congress, which took place in Beijing on 15 and 16 June, celebrated the advent of China as a major meat trading nation. Sustainable growth of meat production was the other major subject of discussion.
British Pig Executive Weekly Export Bulletin

Prospects for pork are described as “positive”. Some 1,000 delegates from 30 countries attended the event. The new President of the International Meat Secretariat is Guillaume Roué, a pig farmer and the figurehead of the French pig industry.

Mick Sloyan, BPEX Director, chaired a historic meeting of six of the largest meat companies in the world including JBS, WH, Danish Crown and Tyson. These businesses account for US$120b turnover and 465,000 employees. Interestingly, all aim for "profitable growth”.

BPEX and EBLEX took part in the large specialised CIMIE exhibition in Beijing (17-19 June) which took place after the World Meat Congress. Demand for pork is good and there is a rising demand for cuts. The type of business is changing with the major processors aiming to cut intermediaries and deal directly with exporters.

France

Carrefour own brand on the grill

Following the successful launch of Carrefour’s own brand sausages for grilling (packed in stores), and the development of the new mixed grill trays, Carrefour is strengthening its range of grilling products by adding marinated pork chops and belly slices. The new recipes include Mexican style and Provencal style, and a more adventurous thyme and lemon proposition selling at €8.80 per kg.

Chiffonnades

Chiffonnades (very thin slices of dry ham) are very popular in France but now Herta has just launched two ranges of cooked ham - steamed and roasted.

Reduced salt everywhere

Surfing on the success of the “reduced salt” proposition, the historical references of Fleury-Michon cooked ham “Authentique” and “A la Broche” are now also available in a version with 25% less salt.

Ma Yao, the French pig meat Ambassador

Synutra, Number two in the baby food sector in China, recently invested €100 million in a new milk plant near Carhaix (Brittany) and, according to Ma Yao, the Chinese food trader, this demonstrates the quality of the reputation of French food in China. Ma Yao spent 15 years in China preparing the ground for imports of French products and although today the price of imports is closely linked to volumes, Ma Yao believes the French brand will boost exports of French pig meat to China for the next 20 years. So far, three charcuterie processors are approved to export to China and another seven should follow shortly.

Markets

Pigs: Firmness continues on the European market for pork butchers, even if increasing prices are taking a break. Last week, consumption in a large part of Europe was better due to the sunny weather. Offers were limited, in particular in the South. Prices oscillated between stability (in Germany, Belgium and Denmark) and increase in Spain and Italy. In the United States, prices increased again last week and everything points to continued increases during the summer.

According to ‘Marché du Porc Breton’, slaughtering has decreased by 4.23% since January and the effects of PED are going to increase over the following months. Stocks are nearly empty due to strong exports since January; limited offers are expected in the short to medium term.

Piglets: Stable prices for pork butchers will support the demand on European markets for piglets. At the same time, due to a stable offer, prices are firm.

Pork prices RUNGIS week commencing 16 June 2014

Cut namePrice range (Euro/Kg)
Back fat, rind-on 0.50
Trimmings 1.34
Leg 2.79
Loin including chump 3.18
Loin excluding chump 2.93
Belly extra without trimmings 2.78

Denmark

Danish Slaughterhouses - payments week commencing 16 June 2014
SlaughterhouseDanish CrownTican
Slaughter pigs (70.0 – 86.9 kg)
Difference to last week
€1.467
unchanged
€1.467
unchanged
Sows (Above 129.9 kg)
Difference to last week
€0.947
unchanged
€0.947
unchanged
Boars (Above 109.9 kg)
Difference to last week
€0.813
unchanged
€0.813
unchanged

Finland

HK reorganises its Baltic subsidiaries

The company is merging its Estonian subsidiary AS Rakvere Lihakombinaat and AS Tallegg to one company HKScan Estonia. It has previously done so in the two other Baltic countries, where they have formed HKScan Latvia and HKScan Lithuania.
(Source, HK Scan)

Germany

Decline in slaughterings

According to figures from AMI, German pig slaughterings in to date at the end of April totalled 365,000 head, 2% lower than in the same period a year ago. The decline is attributed to lower slaughter pig imports in March and April. AMI reports that the decline in imports follows new Dutch regulations making it more difficult to export slaughter pigs from the Netherlands.
(Source, Market news)

Pork Prices Hamburg Market Week commencing 16 June 2014
Cut namePrice range (€ / kg)
Round cut leg 2.40/2.55
Leg (boneless, rindless max fat level 3mm) 3.30/3.45
Boneless Shoulder 2.45/2.55
Picnic Shoulder 2.00/2.25
Collar 3.00/3.20
Belly (bone in, ex-breast) 2.10/2.40
Sheet Boned Belly (rindless) 2.05/2.30
Jowl 1.35/1.45
Half Pig Carcasses U class 2.08/2.18

Spain

Interporc goes on World Tour

The Interprofessional Pig White Layer (Interporc) will tour the American Continent during the month of June.
(Source: Info Alimentación)

Pork prices Barcelona Market Week commencing 16 June 2014
Cut namePrice range (€ / kg)
Gerona Loin Chops 2.85/2.88
Loin Eye Muscle 3.78/3.81
Spare Ribs 3.33/3.36
Fillets 5.48/5.51
Round Cut Legs 3.35/3.38
Cooked Ham 2.74/2.77
Rindless Picnic Shoulder 1.81/1.84
Belly 2.63/2.66
Smoked Belly with Spare Rib Section Cut off 3.06/3.09
Shoulder chap or Head Jowls 1.26/1.29
Back Fat, Rindless 0.78/0.81

USA

World Pork Expo

The event was dominated by the intervention of USDA Secretary Tom Vilsack to a crowded room of producers announcing mandatory PEDv reporting. The show attracted 20,000 producers and stakeholders from 30 countries.
(Source, Pork Network)

Hansel & Gretel closed

The famous deli meats supplier closed after 142 years trading. It was the last remaining meat processor in New York City.
(Source, Meat Poultry.com)

Australia

Higher production

Following years of decline, Australian pork production seems to have entered a new phase and is 2% up in 2013-14 at 364,000 tonnes. Imports are down 10% due to a fall of shipments from the USA.
(Source, ABARES)

China

Six mega-trends

In an excerpt from The One Hour China Book, investor Jeffrey Towson and McKinsey’s Jonathan Woetzel highlight the following six mega-trends that drive China today, for better or for worse.

  • Urbanising a billion people: This is the largest migration in human history, with 300m to cities already and 350m more on the way.

  • Huge manufacturing scale: The manufacturing base has increased more than 18-fold in 30 years and is worth US$2.2 trillion annually in value added.

  • Rising Chinese consumers: An additional 200m people will enter the middle class joining 300m who have done so in the past 30 years.

  • Money and lots of it: The country has more than US$15 trillion in bank deposits, growing by US$2 trillion a year.

  • The brainpower behemoth: Spending on education has doubled, and the number of graduates has increased more than 7-fold since 1998.

  • The Chinese Internet: Although China has more users than any other country (550m), penetration is comparatively low but it's exploding.

New shops for Smithfield

Following the takeover by WH Group, Smithfield is planning to open 20 stores, mainly in hypermarkets to sell sausages, ham and speck from pork imported from the USA. Smithfield will also build the processing plant.
(Source, AFZ)

Financial deal for COFCO

Cofco Meat of China and a consortium of investors composed of KKR, Baring Private Equity Asia, HOPU, and Boyu have formed a strategic partnership aimed at investing in Cofco Meat alongside existing shareholders to build and manage large-scale industrialised hog farms and meat processing plants in China. Cofco Meat is now one of the largest hog producers in China. The company markets its fresh meat and processed meat products under the brands Joycome and Maverick.
(Source, Asia Agri-Biz)

What next for China’s meat processors

Guo Weishi, CEO of major processor Jin Luo was particularly outspoken at the World Meat Congress on the needs of Chinese meat processors: more innovation, more consumer-led developments, less diversification and return to core pork business by the large groups, more consolidation and economy of scale, information sharing, technology and branding. He called for government to take a full role in these changes.
(Source, own)

Pig welfare in China

According to Lesley Lambert of the World Society for the Protection of Animals (now called World Protection of Animals), “Animal welfare is viewed a business proposition rather than a value issue”. She quotes the example of an intervention which resulted in a fall of carcase damage from 0.5kg to 0.2kg per pig.
(Source, own)

Investment in cold stores

According to traders, the government is thinking about food security and building massive cold stores. This is the case near Dalian where 500,000 cubic meter capacity is being added.
(Source, own)

Internet developments

The growth of Internet food sales in major towns is absolutely explosive and new platforms are springing up all the time. Although the retail trade of ambient meat products is growing fast, the development of chilled and frozen supply chains is happening fast, at least in urban areas. TooToo supplies chilled pork and meat products to your door in Beijing the same day when ordered before 11:00am. Processors are also aiming to join the fray. This is the case of Yurun, the second largest, which is fast developing its platform.
(Source, own)

Danish Crown expands

The major pork processor now employs 2,000 staff in China, mainly in its three casing factories.
(Source, Danish Crown)

Chinese wholesale prices week commencing 16 June 2014

 Price (RMB/Kg)£/KgChange on week
Pig Carcases 18.55 1.75 -0.75%
Source: BOACL
Prices collected from wholesale markets in 36 medium and large Chinese cities

South Africa

Better times

After a tough couple of years when profitability of producers and processors was hit by high feed prices, the sector has now returned into the black. The industry is now more compact with three abattoirs sharing 60% of the 36,000 pigs per week output. Production is also more concentrated with 49 large concerns producing the bulk of commercial pigs. The narrowing of the difference between pork and chicken prices in this price-sensitive market is helping pork sales.
(Source, own)

Angola

Pork consumption leader

According to data from Danish Crown, Angola has the highest growth and now the largest pork consumption in Africa, having overtaken Nigeria.
(Source, Danish Crown)

Brazil

The World Cup increases the consumption of pork in Brazil

The hundreds of thousands of tourists who have travelled to Brazil to watch the World Cup have led to an increase of consumption of pork. The Brazilian churrasco is a very good choice of food for tourists. The Brazilian market price in Minas Gerais was BRL3.5 per kg (£0.916 per kg).
(Source: Agrodigital)

Columbia

PED arrives in Colombia

Colombia has confirmed to the International Organization for Animal Health (OIE), a total of 45 cases of Porcine Epidemic Diarrhoea (PED) in its territory with the first detection dated in March 2014.
(Source: Agrodigital)

Ukraine

Enter Pig population increased 2.4%

According to State Statistics, the Ukrainian pig population increased by 2.4% in May compared with April and as of 1 June totalled 7,924,000 pigs.
(Source, pigua.info)

EU inspection of meat and dairy producers

According to the statement made by Andriy Dykun, the Deputy Minister of Agriculture, in July some Ukrainian agricultural enterprises will be inspected by EU officers in for EU certification. The enterprises to be inspected produce meat and dairy products.
(Source, Pigua.info)

Russia

Rosselkhoznadzor will inspect the Lithuanian meat-processors

During 16-20 June, Rosselkhoznadzor officers, together with experts of the veterinary services of Kazakhstan and Belarus, are inspecting enterprises of Lithuania ready meal producers. The officers will also assess the efficiency of the ASF monitoring measures that are taken to prevent the spread of the disease.
(Source: meatinfo.ru)

Violations detected in Serbian meat production

In the course of inspection of Serbian meat producers, Rosselkhoznadzor detected severe violations of the meat and dairy production requirements. Following the inspection on 4 June, meat imports from Serbia were suspended. Officers also discovered that some Serbian companies exporting meat to Russia were using EU pork after the Russian ban on EU imports came into force.
(Source, foodcontrol.ru)

Foot-and-mouth disease in Primorye territory

Foot-and-mouth disease is killing pigs in the Primorye territory of Russia and makes it impossible for locals to buy meat and dairy products. According to estimations from the farmers, the remaining population of pigs in the affected region is 15,000. The biggest outbreak was registered on 20 May on a large pig farm in Prokhory, Spassikiy region where 13,000 pigs died of the disease or were slaughtered. According to the preliminary estimation, the current damage caused by the disease is estimated at RUB500m (US$14.5m).
(Source, meatinfo.ru)

Increasing pig production

Figures from the Russian authorities show that the Russian pig production increased by 9.6% in the first quarter of 2014 compared with a year ago to 855,600 tonnes (carcase weight). Large professional pig producers are reported to have increased their production by as much as 17%.
(Source, Market news)

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