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AHDB Pork Weekly Export Bulletin


14 September 2015

AHDB Pork Weekly Export Bulletin - 14 September 2015AHDB Pork Weekly Export Bulletin - 14 September 2015


British Pig Executive Weekly Export Bulletin

On Monday, the European Commission presented a €500m aid package for the dairy and pig sectors. This news came just ahead of the extraordinary AGRI Council meeting and after the mass demonstration organised by Copa-Cogeca in Brussels. Agri Commissioner Hogan was unfortunately ill and sent Commission Vice-President Katainen to represent him. Regarding pork, the Commission will open a new Private Storage scheme for pig meat and provide an increased promotion budget in 2016, with reserved budget for dairy and pig meat. Addressing supply chain issues, The Commission will set up a market observatory tool for pig meat, similar to the Milk Market Observatory launched last year which monitors milk market trends. This was particularly welcomed at the Council. The Commission will also set up a High Level Group to focus on a number of specific issues including credit for farmers as well as financial and risk hedging instruments such as futures markets for agricultural products. The Commission will organise a range of meetings to discuss experiences and share best practices on unfair trading practices. Copa-Cogeca called for the large and degrading stocks of pork fat, which would have been exported to Russia, to be used as biofuel.

Germany

Goldschmaus expands
Production at the pork processor in Garrel, near Cloppenburg, in the North will have grown from 1.5m head in 2011 to 1.8m this year. It is investing in a new coldstore for export to China and Korea. The company also slaughters and bones-out 30,000 cattle per year. The company owns other interests such as a feed mill, GS Agri und Fleming + Wendeln. Clients include Edeka North, Coop Schleswig, Hit, as well as butchers under the brand ‘5 x D’. (Source, AFZ)

Pasewalk’s new rescue
Pomeranian sausage and meat product firm Pasewalk GmbH in its third bankruptcy, has been bought by HeLa GmbH from Bayern. This traditional business will now concentrate on regional products of high quality. Prior to the 1990s, Pasewalk was one of the largest abattoir and processing plants in East Germany but now employs only 29 people. (Source, LP)

Markets
After two weeks of higher pig prices, slaughter facilities are complaining about meat market demand and were resisting further price increases earlier this week. Sales of pork cuts are more or less at their normal level, but prices have not kept pace with the increasing pig price. However, the number of available slaughter pigs is reported to be slightly lower than current demand. As a result, producers only slightly increased the recommended price to €1.48 per kg. However, it is unclear how the slaughter facilities will react to this price, some of them may pay their own price. (Source, AMI)

 

France

The figures
The drop of exports to Russia is reflected by a negative trade balance, which moved from -€217m in 2013 to -€366m in 2014. The situation is not expected to improve in 2015 or early 2016. The ban was confirmed in Russia in June when demand from Asia was reported to be easing. Also, production is expected to increase in the USA (+6% in 2015) and Europe (+0.8%), whereas it is expected to decrease by 1.5% in France.

Competitiveness
In Denmark or Germany, pigs cost between €1.10 and €1.20 per kg compared with the €1.40 per kg recommended by the French government. The average size of pig farms in Germany is 500 pigs compared with 150 in France. Cooperl slaughters 5m pigs per year and Bigard 4.5m compared with 22 million for Danish Crown, 19 million for Tönnies in Germany and 17 million for Vion in Netherlands. With labor costs in Germany being 40% to 50% lower than in France, the French industry needs strong support to catch up with its European competitors. Three areas have been identified to support French production:

  • Promote consumption of French pork
  • Mention of origin of pork and pig meat based preparations
  • Export, new negotiations to be initiated with Russia and investigation of other potential exports markets (Mexico, South Korea, China, Australia, USA)

Markets
Pork: Between the rise of prices in northern European countries and a slow decrease in Spain, French prices were maintained. However, the market is still subdued due to the absence of the three main players. The base price increased by €c0.2 on Monday at the “Marché du porc Breton”, thanks to an adjustment of the lower prices. The upper range is still €1.40 per kg.
Piglets: The market for breeding and fattening pigs remains apathetic with no imminent improvement in the economic situation. We note that the FNP-COOP index played a role in the stability of the prices in France, both for the 25kg category and the post-weaning pigs.
Cuts: Demand on the pig meat market remained similar to the first week of September. Some retailers are organising promotions which should lead to restocking after the weekend.

Denmark

Markets
On the European market, fresh legs traded at slightly firmer prices this week. Loins and shoulders were also reported to have met slightly firmer demand. The British bacon market was stable with trade at slightly higher prices. On markets outside Europe, good trade was reported to China while quiet trading was reported to other third-country markets.

Spain

Estonia

Support programme
The Estonian authorities are working on a plan to stabilise the national pork market, they will use £1.3m for the purchase of canned pork from pigs from swine fever affected areas.
The plan will be 50% financed by the EU. This means that over the next three months, about 500 pigs per week will be bought and the pork used for canning. (Source, Weekly Tribune)

Russia

Brazilian company approvals
Rosselkhoznadzor granted permission to the following Brazilian meat producers to export meat to the Russian Federation: Cooperativa Central Aurora Alimentos (pork and pork by-products), Goncalves & Tortola ? Averama Alimentos (poultry meat) and Minerva Industria e Comercio De Alimentos (cattle meat). (Source, agrovery.com)

Ukraine

Polish ban lifted
Following a meeting between the Polish Prime Minister and the Ukrainian Prime Minister Arseniy Yatseniuk, agreement has been reached to lift the Ukrainian ban on imports of Polish pig meat. For reference, the Ukraine banned Polish pork following two cases of the ASF last winter. Imports of beef from Poland have been banned since 2007. (Source, pigua.info)

Exports total US$41 million
According to the State Fiscal Service, during the January to August 2015 period, the Ukraine exported pork to the value of US$41m. The value of imports during the same period amounted to US$6.5 million. (Source, pigua.info)

Belarus

Higher production
According to information provided by the National Statistic Committee of Belarus, in July slaughter pig throughputs increased by 4.3% compared with June, with production totalling 32,600 tonnes. During the January to June period production totalled 221,100 tonnes. At the end of July, the total population of pigs in Belarus was 2,733,400 head. (Source, agroperspectiva.com)

China

New investment
TECH – BANK announced that, its wholly-owned subsidiary Hanswine will invest £3m in the Jiangsu Hanswine Food Company. The project covers production of feed and feed additives, pig breeding and pork processing (which seems to be a lot with this limited investment). (Source, CNAgri, our comment)

Yurun’s future uncertain
With Yurun Chairman Zhu Yicai and his wife under house arrest since March for corruption, the cash-strapped group is now the target of Sunac China Holdings. Nanjing-based Yurun’s food business listed in Hong Kong reported half-year net losses of £60m. Its commercial retail property operation is listed in Shanghai. Zhu, the 26th richest Mainland Chinaman has built the company over 20 years may be forced to accept the deal. However, investors are still unconvinced by the bid. In particular, Sunac’s interest seems limited to the property portfolio. (Source, South China Morning Post)

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