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AHDB Pork Weekly Export Bulletin


01 June 2015

BPEX Weekly Export Bulletin - 1 June 2015BPEX Weekly Export Bulletin - 1 June 2015


British Pig Executive Weekly Export Bulletin

HMRC data reveals that, following higher pork exports in February, UK exports fell by 12% on the year in March to 16,000 tonnes. Reduced demand from China at that time resulted in shipments falling by 27% year-on-year, while difficulties in Hong Kong resulted in a decrease of more than 40%. The fall to Germany was less marked at 8%. Exporters know that these difficulties are likely to be temporary and we expect exports to rebound over the next few months. Chilled shipments made up 60% of the total in the month and were 1% higher on the year; this was more than offset by the fall in frozen exports. Shipments in the January to March quarter totalled 46,000 tonnes, a fall of 4% compared with year earlier levels. However, we still expect to register an overall growth of exports over the full year.

Germany

Tönnies wants to be involved in the weaner trade
As a large proportion of Tönnies’ output relies on pigs produced from imported weaners, the company wants to increase the number it buys directly through Tönnies Livestock Company to control quality. (Source, Boerderij Vandaag, AFZ)

“Tierwohl needs more money”
The success of the pig welfare initiative is limited by the pot of money made available by German retailers. Some retailers such as Metro, Globus, Citti and Familia who are not yet contributing may be asked to enter the scheme. Although everybody says the scheme needs more funding, the answer is not clear. (Source, AFZ)

Markets
Following two weeks of increasing pig prices in Germany, the pig market is now roughly balanced. Impulses from the meat market, mentioned last week, have diminished as demand for barbecue meat has decreased. Slaughter facilities are ordering more cautiously. While some producers in the northern regions of Germany mention slightly insufficient pig numbers, the majority of market participants point to an overall balanced market. Therefore, the recommended price remained unchanged at €1.45 per kg. (Source, AMI)

 

Netherlands

Vion refinanced
ABN Amro and NIBC are lending €100m to Vion to implement its strategy of concentrating on core skills and fewer plants. (Source, AFZ)

Topigs FCR goals
Topigs Norsvin will aim to lower Food Conversion Ratio (FCR) from the current 2.57 to an ambitious 2.30 - 2.20 over the next ten years, says MD Martin Bijl. (Source, Boerderij Vandaag)

Competition for Topigs
PIC boars accounted for 50.6% of semen doses at Twenthe KI, the AI centre in 2014, up from 34.9% in 2013. This growth took place at the expense of Topigs now back to 36.6% from 42.4% and German Piétrain also back to 8.4% from 15.4%. Other suppliers include BHZP (0.8%) and Belgian Piétrain (3.6%). KI Twenthe marketed 380,000 doses of semen in 2014. (Source, Boerderij Vandaag)

Denmark

Pig welfare conference
The high profile conference that took place at the beginning of May was a political (and marketing) affair with Ministers from Denmark, Germany, Sweden and the Netherlands who are currently allied in pushing up the European agenda. The (un) representatives from the UK were Compassion in World Farming (Peter Stevenson, keynote speaker), Newcastle University (Sandra Edwards) and RSPCA (Jeremy Cooper). There were no consumer or producer groups represented, only politicians, lobby groups and scientists. The Danes unveiled a new pig welfare index. (Source, own)

Markets
On European markets, fresh hams traded at virtually unchanged prices this week. Other cuts are also traded at similar price levels. The poor barbecue weather in Northern and Western Europe continues to hamper demand. The British bacon market remains unchanged with stable sales. For markets outside Europe, stable sales to Japan with good sales direct to China are reported. (Source, lf.dk)

 

France

Price structure
Analysis of the retail price of pork chops shows that the lower price of the raw material, down by €0.25 per kg, was not reflected in the processing sector where margins fell by €0.05 per kg. At the same time, margin for retailers on the sale of pig meat increased by €0.23 per kg.

Purchases of charcuterie industrial retail packs
Charcuterie purchases over the rolling year ending March 2015 saw increases for large coarse sausages (+4.7%) followed by bacon, belly and lardons (+2.9%), cooked ham (+1%) and black pudding (+0.4%). In contrast, andouille and andouillette (traditional intestine-based sausages) saw a 4.6% decrease in purchases, followed by “pâté” (-2.8%) and large cooked sausages (-1.6%).

Polarisation
The current crisis in the pig sector pushes the development of joint ventures in a, traditionally, strongly fragmented industry. It is possible that two producer cooperatives, CAP 50 (350,000 pigs per year) and CAM (200,000 pigs per year), could join together in 2015 with the deal possibly being completed before the end of the year. Cap 50 would be supported by CAM to supply the AIM abattoir in Ste Cécile. In a second stage, the new joint venture Cap50–CAM could integrate a section of Terrena representing 180 producers and 400,000 pigs per year. The ultimate combination would represent 960,000 pigs that would strengthen the Alventis producer group which is the mother company of the pig division of Terrena. Today, Alventis is the second largest group of pig producers representing 3m pigs per year compared with 5.6m for Cooperl.

New agriculture and Système U
Terrena will inject €2m over 5 years to support 180 producers in renovating their pig sheds. The project should boost the development of the Nouvelle Agriculture programme designed to improve animal welfare with producers. This project is developed in partnership with Système U and should see half of the producers committed to the programme by 2017. Last year, the Nouvelle Agriculture scheme involved 35,200 pigs and a 25 product range was branded Nouvelle Agriculture on Système U own brand retail packs. In 2015, the production is expected to reach 70,000 pigs supplied by 34 producers.

Markets
Pigs: Last week, we saw confirmation of price rises for North-European pig breeders. In Germany, despite a stable market, the availability from breeders was just sufficient to cover demand. Quotations increased by €c3, raising the Belgian prices (+€c2) and Dutch (between €c2 and €c3). This trend of firmness was more prevalent in the South, in particular in Spain. This week, everything will depend on European consumption. It is nearly the start of the month which could be good for the market.
Piglets: The market is stable at unchanged price levels. However, it is to note that prices are still under pressure in Spain and in the Netherlands.

Spain

 

Sweden

Danish Crown takes over Dalsjöfors
Danish Crown’s Swedish subsidiary KLS Ugglarps has bought a majority share in Dalsjöfors Slakteri. The agreement means that the CEO and Chairman of Dalsjöfors, respectively, Magnus Larsson and Per-Inge Nilsson will keep their co-ownership of Dalsjöfors. Magnus Larsson continues also as Director of Dalsjöfors. KLS Ugglarps and Dalsjöfors are, respectively, second, and third-largest pig abattoirs in Sweden slaughtering 600,000 and 300,000 pigs, respectively, in 2014. The biggest pig abattoir group is HK Scan with 0.9m. In 2014, 2.6m pigs were slaughtered in Sweden. (Source, Markedsnyt)

Finland

Ethanol by-products for Finnish and Swedish pigs
HK Scan has signed an agreement with North European Oil Trade Oy for the supply of ethanol by-products in pig feed in Finland and Sweden. HK Scan had developed the technology in Finland. (Source, Agra Europe)

Russia

Pork prices decreased
As of 27 May, the average price for first grade pork quoted by Russian producers in the Central Federal Region was RUB179 per kg (US$3.44 per kg). For second grade pork, the average price was RUB170 per kg (US$3.27 per kg). The highest price was registered by Ural Federal Region at RUB193 per kg (US$3.71 per kg). The live pig price remained unchanged at RUB117 per kg (US$2.25 per kg) for first quality and RUB115 per kg (US$2.21 per kg) for second quality. (Source, agronews.ru)

Ukraine

Pork prices stable
The average pork price, in liveweight terms as of 22 May was UAH31.25/kg (US$1.52 per kg). The average prices remained unchanged despite decreasing trade activity. Export trade has been stable. (Source, pigua.info)

Sausages production falls
According to State Statistics Service Data, in Aril 2015 Ukrainian sausage production at 18,400 tonnes was 19% lower compared with April 2014. Meanwhile, fresh and chilled pork production in April 2015 grew by 4% to 20,600 tonnes, and the production of frozen pork increased by 70% to 1,700 tonnes. (Source, agravery.com)

Belarus

Pigs import from the EU increased
According to information form the National Statistic Service of Belarus, during the January to March period, Belarus imported 2.263 pigs from the EU valued at US$630,200. 1,735 pigs came from Denmark, 388 pigs from the Czech Republic and 140 from Ireland. Breeding pigs accounted for 9.4% of the total, other pigs weighing >50kg made up 13.9% of the total with the majority, 76.7%, being piglets weighing <50 kg. (Source, agronews.by)

USA

What a difference a year makes
Following a year of record profits in 2014, 2015 is turning out to be very different. Prices paid to producers have halved. Higher productivity and throughput, as the industry has recovered from PEDv, of 7% in the first half and 9% predicted in the second half of 2015, combined with the negative effect of the high US$ on exports, are dragging down prices. Still, producers should be in the black this year due to low feed prices. In a market report, the USDA is bearish regarding the period Q3 2015 to Q1 2016 quoting the high levels of frozen stocks, particularly legs. (Source, Pork Network, USDA)

WalMart “game changer”
WalMart will use its buying muscle to ask meat and egg suppliers for higher standards of animal welfare and monitoring of the use of prophylactic antibiotics. Guidelines regarding the use of gestation stalls and surgical operations have been issued. Suppliers will be asked to issue annual reports on animal welfare and antibiotics use and post them on their website. These changes are driven by public demand. WalMart said its own research showed 77% of its shoppers said they will increase their trust and 66% will increase their likelihood to shop at a retailer that improves the treatment of livestock. With WalMart accounting for 25% of all the food sold in the USA, this is a game changer. Reactions from industry and government to this important announcement have been mild. Larry Pope Smithfield Foods' President supports the move, saying that his company already complies with the new requirements. Some 70% of Smithfield Foods’ farms already work with group housing systems for sows and the conversion should be completed by 2017. (Source, ABC News)

Mexico

Veterinary inspection
As mentioned in past bulletins, SENASICA will carry an audit mission on site in Italy, France, Portugal, Romania and Belgium from 15 to 29 June. (Source, European Commission)

China

Germany and Spain lead Chinese imports
For the period January to April, German and Spanish imports represented 45% of total pork imports of 200,000 tonnes, ahead of the USA with 18% and Denmark with 10%. The UK comes back to seventh position with 4.65% of the total just behind Chile with 4.87% and Canada (6%). Ireland (3.67%) and Hungary (2.45%) register good performances in the period. (Source, CNAgri)

Zhengbang to expand
Jiangxi Zhengbang Technology Co. of Nanchang (Jiangxi), a listed feed premix and veterinary products company has raised £114m for pig production units and a new feed mill. (Source, CNAgri)

French imports
Imports of breeding pigs have slowed down over the first four months of the year, with the exception of shipments of 1,000 pigs from France. The USA exported 91 pigs in the period, and Canada, normally a large exporter of purebred animals, none. (Source, CNAgri)

New ‘model’ producer
Jiangsu Guo Ming Agricultural Development Company will build, initially, a 5,000 sow model farm with the best available technology. The unit will be completed in two years’ time and will be located in Shuyang, Jiangsu province. The purpose of the project is the production of high welfare, antibiotic-free pork in a natural and effective way, and with a significantly lower environmental impact of manure management. The company will work with Alltech on feed, Big Dutchman and Betco on construction and design, PIC on genetics and Pipestone on training. (Source, Pig Progress)

 

Vietnam

Mavin Foods expands
Vietnam’s Mavin Foods Joint Venture Company's new processing plant which came into operation last September has been producing more than 60 kinds of sausages, hams, pate, bacon and salami at the Dong Van Industrial Zone. “We hope to export sausages and cold cuts to Cambodia and the Philippines,” says Nguyen Anh Tuan, Deputy General Director of Mavin. Mavin Foods, a US$15m Vietnamese joint investment company with Australia, has the distinction of being Vietnam’s only farm-to-table food processor. This is a subsidiary of Austfeed Vietnam, which owns feedmills, veterinary pharmaceutical plant, GGP breeding swine farm and contract farms in Vietnam. (Source, Asia Agri-biz)

Singapore

Malaysian pork allowed again in Singapore
Following a decade-long ban on pork from Malaysia, the frozen product is back on the shelves in Singapore. The Republic's Agri-Food & Veterinary Authority (AVA) recently approved the import of frozen pork from a slaughterhouse in Sarawak, East Malaysia. (Source, Asia Agri-biz)

Philippines

New tariffs on jowls
The Philippine Department of Agriculture (DA) is calling for higher tariffs on imported frozen pork jowl or neck cuts, saying these are premium meat cuts. DA Undersecretary Jose Reaño said pork jowl and neck cuts are currently lumped with offal and are only charged a 5% duty. Should the Tariff Commission approve the proposal, pork jowl and neck cuts will be included under the minimum access volume scheme and will be levied a 35% tariff. Reacting to concerns that higher tariffs would bring up prices, Mr Reaño countered that local producers can easily increase production to meet any increase in demand (a strange answer: you produce pigs, not jowls!). (Source, Asia Agri-biz, our comment)

Weaker demand for pork
Although prime pork prices have remained stable, the Pork Producers’ Federation (Propork) says prices for semi-prime pork and sows have gone down. Demand has been relatively weak and the release of large stocks of imported pork that were held back during last year’s port congestion in Manila has affected trade. (Source, Asian Pork)

Thailand

S Khonkaen eyes 15% growth in 2015
The Thai processor operates two fast food chains Zabb Express and Yunnan Pork Leg. It is expanding the number of outlets of Yunnan Pork Legs to 35, including two in Laos. (Source, Asian Pork)

CPF major promotion
Chareoen Pokphand Foods (CPF) is investing £4.6m in an advertisement campaign to promote sliced bologna sausage. The Thai pork leader has a 31% share of this growing market. (Source, Asian Pork)

VPF invests
The pork group from Northern Thailand is investing £8m in a training centre, a further processing plant and a retail shop under its Pork Land project. (Source, Asian Pork)

Malaysia

New data
According to a US Gain report, 40% of Malays consume pork. Consumption is likely to remain around 240,000 tonnes this year. However, the processed pork segment is seeing exponential growth. Some processors (Fil-Austrian, Euro-Swiss, Earle’s…) own stores, others (San Miguel, Orient Fresh…) retail their products in supermarkets where shelf space for these products has increased. (Source, Asian Pork)

Meat Expert Co.
The company’s Managing Director David Choong says that it is importing all its processed meats from the USA, UK and other EU Countries. It serves its restaurant, “The Three Little Pigs and the Big Bad Wolf” and other outlets. (Source, Asian Pork)

Japan

Exceptional results for Prima
Prima Meat Packers reported net profits of £54m for the current financial year on a turnover of £1.9b. These good results are driven by increased sales of processed pork products to convenience stores. The weaker Yen is pushing up prices of imported pork. (Source, Asia Agri-biz)

Over 1,000 file lawsuit against TPP
More than a thousand people filed a lawsuit in Tokyo seeking to halt Japan's involvement in the 12 country talks on a Pacific Rim FTA. The Lawsuit is led by former Minister of Agriculture, Masahiko Yamada, and is on the basis that the TPP would undermine the basic human right to a stable food supply. The plaintiffs claim the pact would jeopardise food safety, destroy the domestic farming sector and increase Japan's reliance on imports. Under the TPP, Japan could be forced to cut pork duty to ¥50 per kg from a maximum of ¥482. (Source, Japan Times)

Nepal

Ban on meat sales – new pork abattoir
Following the recent earthquake, sales of meat have been suspended in the Kathmandu district due to risks of pandemic. There is still an outbreak of “swine flu” in Western Nepal and some people in Kathmandu have been affected by avian flu. This ban is likely to be temporary. A new small abattoir (Fresh Hygienic Food Agro Co.) opened in March. It collects pigs from 300 farms in the Kathmandu district and also further processes the pork in sausages, ham and bacon. (Source, Asia Agri-biz)

India

New report on pork production
Dr Eknath Chakurkar Principal Scientist at the Indian Council for Agriculture Research (ICAR) advocates pig production as the way to cut the Indian protein deficit and increase the income of farmers. He quotes the healthy but unfulfilled demand for pork, bacon, ham and sausages. The consumption of animal protein in India is only 14g per day against a recommended 125g. (Source, Asian Pork).

Myanmar

US pork
Boise-based Agri-Beef Co imported the first pork, bacon and beef from the USA. Agri-Beef has operations all over Southeast Asia. (Source, Asian Pork)

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