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AHDB Pork Weekly Export Bulletin


14 November 2014

BPEX Weekly Export Bulletin 14 November 2014BPEX Weekly Export Bulletin 14 November 2014


British Pig Executive Weekly Export Bulletin

Some 22 Chinese high level guests from the Chinese Animal Agriculture Association (CAAA) delegation attended the BPEX sponsored reception during Eurotier fair that took place this week in Hanover. Four British pig genetics companies made a short presentation. Eurotier, the largest professional livestock show in the world was expected to attract 160,000 visitors for 2,360 exhibitors on 241,000sqm. The situation in Russia dominated discussions. Unsurprisingly, there were fewer Russian visitors but, on the other hand, more visitors from Asia.
BPEX attended the Food & Hotel China exhibition in Shanghai this week. We will report further next week.
Liz Truss, Secretary of State, has confirmed she will visit Beijing from 1 to 3 December. BPEX will be involved with the visit. We are also discussing industry involvement with this important mission.
EU pig prices (at 23 October) are now lower than Brazilian, US or Canadian prices despite their recent fall at €143.4/100 kg carcase in the EU against € 186.0 / 100 kg carcase in the USA, € 174.0 in Canada and €179.2 in Brazil whose prices have converged. This historical situation should give an advantage to EU pork in Third Countries and facilitate the switch from Russia to other markets. However, intense competition between EU exporters now mean that EU export prices are lower than US, Canadian or Brazilian prices. Thus, although we are in a good position to gain market share, we have not retained additional margin.

France

Antoine d’Espous

At the recent SIAL show in Paris, the head of CA Holding and Loste Tradi-France revealed his plans for “La Lauragaise” (ex Spanghero) now named “Les Occitanes”. The brand will be used to launch the “real” Toulouse sausage (400g), together with superior quality chipolatas (350g), fresh chorizo (400g) and real olive-oil based merguez (400g). The prepared meal business has been transferred to Larnaudie, another subsidiary of Antoine d’Espous. Antoine d’Espous also took over the wholesaler “Maxime Géraud” based near Paris specialising in the slicing of quality Frais Devant branded hams to develop its qualitative strategy.

JPA

SVA is planning to invest €18m in Josselin Porcs Abattages or JPA, ex GAD. An additional €6m investment should support the re-start of the business. In 2013, SVA ended the financial year with a net loss of €1.6m compared with a surplus of €6.8 million in 2012.

And the winner is…Guyader

Guyader, the charcuterie specialist with factories, took over the Euralis cooperative’s Brittany-based factory in St Agathon, Côtes d’Armor. This modern 7,500sqm plant built in 2006 will incorporate all cooking and slicing activity of the Guyader group. The energetic performance of the plant, the hygiene and environmental standard and the working conditions are top class which will considerably strengthen the position of Guyader.

Markets

Pigs: Last week, the European market was stable. With winter approaching, consumption is more dynamic, especially in countries where lower production costs have been reflected at consumer level. Opportunities will be on the Asian markets during December as the Chinese New Year approaches. Supplies remain sufficient, particularly in Germany, Spain and the Netherlands, and prices remained stable last week.

Piglets: Due to the seasonal weakening of supplies, the European market for piglets is a bit stronger, as availability decreases and prices should be firmer.

Germany

German pig market balanced at high level

The number of slaughter pigs in Germany is still relatively high, with supplies increasing week by week. At the same time, demand from slaughter facilities is reported to be good, enabling pigs to be placed without problem. In Southern Germany, pigs are being sold to Austria as prices are comparably low price in Germany which has tightened supplies in the region. Minor market impulses have been reported on the meat market with a small improvement in sales. However, higher prices cannot be achieved and the recommended price remained unchanged at €1.40 per kg.

Gausepohl takeover bid

Germany's largest meat company, Tönnies, wants to take over the beef business of Lower Saxony slaughterhouse, Gausepohl. The takeover is subject to the approval of the German Federal Cartel Office. Last year, Tönnies generated the majority of its total sales of €5.6b from the pork business. Tönnies Beef currently operates a plant in Allgäu and one in Wilhelmshaven. With the acquisition of Gausepohl plant in Dissen, the meat group could reduce the gap with market leader Vion, who slaughtered around 900,000 cattle in 2013. After the possible Gausepohl takeover, Tönnies will slaughter around 660,000 cattle annually. (Source, RHEDA WIEDENMANN BRÜCK/diss, dpa-AFX)

Tönnies’ frustration

Clement Tönnies, the leader of the German meat industry, vented some frustration against EU and German politics towards Russia at the National Meat Congress. Russia is, above all, a market for fat which is difficult to replace. Tönnies is keen to supply the market again, especially as good cutting fat prices still sell around €6.60/kg. As we are aware, Tönnies also owns a large concern in Russia. (Source, own)

Tönnies, undisputed leader

Tönnies is consolidating its position as the leader of the German meat sector with a turnover of €5.6bn. (+12%), 50% of which relates to exports (2013). The firm employs 8,000 staff which is less than Vion (9,200) which has a much lower turnover at €3.7bn. Westfleisch remains in third position with €2.5bn. with only 1,840 staff. For comparison, Tönnies slaughtered 16.4m pigs in 2013, Vion 9.5m, Westfleisch 7.4m. Nine concerns slaughtered more than 1m pigs in 2013. These also include Danish Crown 2.7m, Vogler 2.3m, Müller 1.6m, Böseler Goldschmaus 1.5m, Tummel 1.5m and TMR 1.2m. (Source, AFZ)

Tönnies foray to the USA

Following a successful USDA/FSIS inspection, the Rheda firm has started to export chilled pork to the USA. The products are described as grilling cuts. (Source, AFZ)

Russia hit for Westfleisch

For the first six months of the year, Westfleisch Third Country exports fell by 25.7% year-on-year due to the closure of the Russian market. Overall, exports are only back 3.9%. Otherwise, volume and turnover are stable. (Source, AFZ)

Müller new scheme

The South German group has launched a new regional pig scheme, "south German Pork”. Pigs must be born and bred in Baden-Wurttemberg or Bavaria. The scheme will aim for two* animal welfare rating. Pork is destined to supermarkets, discounters and the manufacture of local specialties. (Source, Müller Group).


USA

Strong USA exports

At 162,125 tonnes, USA pig meat exports were 7% up on the year in September despite the Russian veto. Exports were valued at US$513m in the month. In the January to September period, exports were 5% higher at 1.64m tonnes. (Source: Eurocarne)

British wheat for US pork

Murphy Brown, a subsidiary of Smithfield Foods, has purchased a consignment of British feed wheat for pork production. The Nin will carry 25,000 tonnes of wheat from Harwich to Wilmington, North Carolina. Traders say local shortage and logistics make expensive UK wheat attractive to feed compounders. Following two years of low production, UK grain is available again at attractive prices. (Source, Pork Network)

Smithfield’s profits

With the recent good prices and lower feed costs, Smithfield has reported profits of US$ 42 (£ 26.50) per slaughter pig in its production division in the third quarter. CEO Larry Pope says he expects lower prices in 2015. Smithfield slaughtered 9% fewer pigs in the third quarter due to PEDv. (Source, Smithfield)

Russia

Reopening to the Ukraine

The Russian agency Interfax has reported that Russia will authorise the reopening of the Ukraine market for pork products. Two slaughterhouses will be able to export to Russia, they must guarantee that the meat comes from ASF free zones. (Source: Mercolleida)

Belarus is planning to resume pork export to Russia at the end of November

The Director of the Department of Veterinary and Food Surveillance says Belarus is planning to resume pork exports to Russia. Imports were suspended on 31 October following the discovery of the ASF virus. The Belarussian Veterinary Service suspect that the source of the infection is raw material imported from Moldova and Montenegro. Both Belarussian and Russian veterinary services are going to monitor the situation. If the Russian officers are satisfied with test results, shipments may resume at the end of November. (Source, ria.ru)

Pork from many sources

Large volumes of pork from Thailand are now exported to Russia. Russia is also now sourcing some Vietnamese pork. Russian importers and authorities are reported to be unhappy with the quality and price of Brazilian pork. With the prices so high in Russia, increased smuggling of live pigs and pork is reported. The Russians seem to tolerate imports of European pig semen. (Source, own)

Ukraine

Downward price trend continues

Wholesale pig prices continue to fall in the Ukraine. On 10 November, liveweight pig prices averaged UAH22 per kg (US$1.6 per kg) in the central region, UAH23 per kg (US$1.67 per kg) in the western region and UAH22.5 per kg (US$1.64 per kg) in the eastern region. Market analysts report that the decrease will continue until the end of November when New Year demand for pork is forecast to push prices up. (Source, Pigua.info)

Pig population decreased slightly

According to the State Statistic Service of Ukraine, at 1 November the pig population in the Ukraine totalled 8.1 million head, down 2.3% compared with the same date in 2013. (Source, meatinfo.ru)

Netherlands

Insects for meat

Damhert/Fallow Foods have launched a range of insect-based products called Insecta – schnitzel, meat balls and burgers on the market using buffalo worms. So far, it is unclear where the product is sold in Belgium. Dutch retailer Jumbo had a good stunt in listing the products in two stores, Groningen and Haren. The data so far shows that more than two-thirds of Flemish people would not buy the product. The data for the Netherlands is more positive if unclear, with 70% of consumers saying “definitely” or “maybe”. Insect-based products are pushed by a variety of lobby groups in the country as an alternative to meat. (Source, various)

Douma wants more EU marketing for pork

Following a meeting with Minister Dijksma, Eric Douma, the Chairman of the Pig Chain Platform, said that the current low prices are due to the low internal demand, the closure of the Russian market and large supplies. Resolving the issue of low prices must come “from the market”. A report from Rabobank agrees with this diagnostic. (Source, Boerderij Vandaag)

Belgium

Delhaize new pork

Delhaize has joined the growing band of retailers (this includes Colruyt) offering high omega3 pork. Delhaize is investing € 200m in the venture. Added costs amount to €2.59 per pig and Delhaize is adding a premium of €1 per pig. (Source, Boerderij Vandaag)

Denmark

Growth of live exports

For the period January to August, Denmark exported 7.835m weaners (+10.5% on the same period of 2013). This growth was driven with larger shipments to Poland of 2.370m weaners (+32.2%). Exports to Germany are stable at 4.353m. This is, of course, affecting Danish pork production, down 2.3% for the period January to August. (Source, Markedsnyt)

Italy

San Daniele ham to be promoted

The San Daniele consortium will benefit from EU promotion funding with a € 5.6m programme, with focus on Germany, Austria and the UK. (Source, European Commission)

Old specialty gets PGI status
The salama da sugo from the Ferrara region is a boiled salami stuffed and tied in a pig bladder. (Source, European Commission)

Philippines

Canadian trade mission

The Canadian pork sector is sending a trade mission to the Philippines this week, thus following us within a few weeks. (Source, Manila Standard)

European favourite

The Philippines comes trumps as destination for European pork exports. Exports for the period January to July are up by 85.9% to 113,017 tonnes, making it the third destination behind Greater China and Japan, slightly ahead of Korea, also up 84.3% to 111,883 tonnes. However, exports to Korea are still nearly half what they used to be some years ago. (Source, AFZ)

China

Austrian pork next

China has agreed to import pork from Austria from next year, the Austrian media reported. (Source, various)

Denmark

Spain

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