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AHDB Pork Weekly Export Bulletin


17 August 2015

AHDB Pork Weekly Export Bulletin - 17 August 2015AHDB Pork Weekly Export Bulletin - 17 August 2015


British Pig Executive Weekly Export Bulletin

After two and a half years of negotiations, a Free Trade Agreement (FTA) has been agreed with Vietnam. This includes the elimination of tariffs for pork imports over a seven-year period. We are now looking into the detail of the agreement.

On 31 July, the Russian Government adopted a decree which lays out procedures for the destruction of banned food and agri products from the US, the EU, Canada, Norway and Australia found within the Russian Federation. The new procedures came into effect on 6 August. They include requirements that the destruction be video-taped and witnessed by at least two individuals. Some pork has already been destroyed. It is reported that this has led to cancellations of transit permission applications, eg shipments of EU pork to Central Asia.

France

MPB sale cancelled
According to a SNIV – SNCP press release published early on Monday afternoon, three major buyers (30% of pig purchases in 2014): Bigard, Socopa and Cooperl decided to boycott the first sale of the week. With only 4 buyers remaining, the sale was cancelled by the Regional Pig Committee (CRP). Mr Drillet, President of Cooperl Arc Atlantique said he could not afford a “political” price fixed at €1.40 per kg when he could buy EU pigs at €c25 per kg less. Cutting a pig in Germany costs €12.00 per pig less than in France. This gap is estimated at €c70 per kg for deboned legs purchased by charcuterie processors. The persistent issue of unfair competition and social dumping is disrupting the European pig meat market, the above dispute appeared as the first item of national news in France (TV, radio, etc) on Wednesday. The French Minister of Agriculture, Mr Le Foll, insists that the minimum price of €1.40 is maintained at the next sale in MPB in Plérin and that this price is evenly passed along the chain down to consumers. We will wait and see…

Increased costs
With a pig price at €1.40 per kg, do French pig farmers make sufficient returns? Production costs, which are predominantly feed and investment for improved animal welfare, have increased year-on-year. In the year 2000, the total cost of production of pigs ranged between €1.20 and €1.35 per kg, but since 2011 the cost has never been below €1.50 per kg. On one rolling year ending in June 2015 pig farmers lost between €c8 and €c9 per kg, which they say equates to between €200.00 to €400.00 per sow. At the moment, a quarter of French pig farms are financially in trouble.

Linked pig farms
The French pig meat industry has an efficient traceability database, BDPORC. This efficiency has been recognised and from now on, on a dispensation basis, pigs moved between two linked farms do not need to be tagged before they exit of the first farm, as long as the link between the two farms is recorded on the national pig Database.

PGI for Auvergne “saucissons”
The firm reputation of dry charcuterie from Auvergne has been recognised with the allocation of PGI status to dry sausage (saucisse d’Auvergne) and dry ham (Jambon d’Auvergne). This is the result of almost 15 years work to differentiate the traditional drying and salting methods used in the Auvergne region. Dry charcuterie represents 4/5 of the total charcuterie industry of the region that includes the French “départements”: Haute Loire, Cantal, Puy de Dôme, the southern half of Allier and Ussel area in Corrèze.

Markets
Pigs: Due to the absence of three important buyers and the subsequent MPB decision to cancel of the sale, there was no quotation for 56 TMP price on Monday at Plérin.
Cuts: In the cities, the summer break is not good for the market, whereas in the holiday resort areas sales are good. It all depends on the weather forecast and people’s inclination for barbecuing. A new calm period is envisaged for the weekend and retailers are waiting to see the consumption trends in the short term.

Denmark

July census
Last week, Statistics Denmark announced the results of the 1 July pig count. The census is based on a sample of approximately 2,500 farms. The census shows that as at 1 July 2015 the total pig population was 1.4% higher than a year ago. This was driven by the increase in piglets, weighing under 50kg on farm this year. In contrast, the number of pigs over 50kg was 3.4% lower on the year. In-pig sow numbers declined by 1.4% on the year. (Source, Statistics Denmark, lf.dk)

Markets
On the European market fresh hams traded slowly at virtually unchanged prices this week. Trade to the British bacon market was under slight pressure due to greater supplies in recent weeks. As for markets outside Europe, strong activity was reported for trade to China, with steady sales to Japan and other third-country markets.

Germany

Recommended price remains under pressure
Supplies of slaughter pigs are still comparably low in Germany, while the demand for pig meat in most regions is even lower. The only exception is in Southern Germany, where a balanced market is reported. At the same time, sales of pig meat are still low for the season and any new market impulses are minor at best. Therefore, the producers had no option than to slightly decrease the recommended price by €c1 per kg to €1.35 per kg. (Source, AMI)

REWE decision on castrates
From 1 January 2017, the REWE Group will not offer any fresh pig meat under their own brands which originates from pigs that were castrated without anesthesia. The company informed its suppliers of this important decision last Tuesday. (Source, www.topagrar.com)

Ukraine

Higher exports
According to the State Statistic Service, during the January to July 2015 period, the Ukraine exported 18,620 tonnes of pork, representing an increase of 7.4 times compared with the same turbulent period a year ago. Pork import during the period amounted to 2,184 tonnes compared with 20,170 tonnes in the same period a year ago. (Source, pigua.info)

48,000 pigs destroyed to date
On 28 July, an outbreak of the ASF was registered at Kalyta, a pig unit with 60,000 pigs. To prevent further spread of the disease, a decision was made to slaughter and incinerate the pigs. As of 11 August, 48,000 pigs had been disposed of. The loss to Kalyta is estimated at UAH200m. (Source, meatinfo.ru)

Spain

 

Russia

Pig population grows
As of July 1, 2015, population of pigs in Russia was 21,826,000 pigs, up 5.4% compared with a year earlier. (Source, pigua.info)

Belarus

Import restrictions
On 12 August, Belarus temporary banned the import of pigs, pork, pet food (untreated by heat) and used equipment from the Kabardin-Balkar Republic, Krasnodarskiy Krai and Riazanskaya oblast of Russia, due to the threat of the ASF. (Source, Belta.by)

Japan

Spanish success
Spanish pork exports to Japan have more than doubled over the last two years to 35,000 tonnes during the first half of the year. This appears to be largely at the expense of Denmark down to 50,000 tonnes in a fairly static overall market of 380,000 tonnes. Other countries to have increased market share include Canada and Mexico. The USA retains the largest volume with 129,000 tonnes, albeit sharply down. Unlike other markets, the low Euro has not benefited EU exporters. Total EU exports are down to 123,500 tonnes from 140,000 tonnes in the first half of 2015. (Source, ALIC)

USA

Cargill reports losses
Cargill posted losses of US$51m (£33m) in the latest quarter. For the period, turnover is down US$28.4b (£18.3b) from US$38.2b (£24.6b). The company blames high beef prices, asset impairment and Venezuelan troubles. The pork division recently sold to JBS for US$1.45b (£934m) performed well. (Source, meatpoultry.com)

China

Sow herd still shrinking
The June live hog inventory showed a total of 384.61m head, down by 10% year-on-year. The sow inventory was 38.99m head, down by 14.8%. The Chinese sow herd has now declined for 22 consecutive months. Most of the fall has been compensated by higher productivity but still leaving space for higher imports. (Source, CNAgri, our comment)

Yurun now approved for pork exports to Russia
Yurun follows Shanghui as export approved to Russia. Little or no export has taken place due to the high Chinese prices. Still, China is well placed to supply Eastern Siberia, which has limited pork production. (Source, Pig International)

Singapore

Metro buys Classic Fine Foods from private equity EQT
CFF, a purveyor of gourmet foods including from the UK and present in 25 Asian locations, is valued at £211m and has sales of £128m. (Source, Bloomberg)

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