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AHDB Pork Weekly Export Bulletin


21 June 2016

AHDB Pork Weekly Export Bulletin - 20 June 2016AHDB Pork Weekly Export Bulletin - 20 June 2016


British Pig Executive Weekly Export Bulletin

There are twelve days left before the annual meat Export Conference, taking place on 29 June at the Hilton Hotel, Warwick, which is conveniently located off the M40. This important event is taking place six days after the result of the referendum whether to remain in the European Union. The programme will include a review of the export situation, including market access work and presentations by Polish and Japanese speakers. Karen Morgan, the Agriculture Councillor at the British Embassy in Beijing will update participants with the situation regarding market access to Mainland China. The conference that includes a networking lunch starts a 9.30am and is free to exporters. For registration please contact Claire Sayers-Smith at Claire.Sayers-Smith@ahdb.org.uk

CNAgri reports that the gap between Chinese production and consumption in 2016 is likely to be in the order of 110m head, with total production of 640m pigs. This means that import will represent 12-13% of the market against 1% in recent times. Recovery is likely to be slow due to environmental and capital constraints, and driven by the largest concerns.

Germany

Markets
Large discrepancies between the slaughter and meat markets are being reported in Germany. The number of pigs is comparably low and numbers are not predicted to increase in the coming weeks or even months. At the same time, slaughter facilities are looking to secure pigs to maximise their capacity. At the same time, the meat market continues to lack any impulse and sales are below expectations. Almost all marketers complain about the prevailing prices and are very much against any further increases in the pig price. Nonetheless, due to the low number of slaughter pigs the recommended price was increased by €c6 per kg to €1.57 per kg. (Source, AMI)

France

Cooperl moving forward
In spite of a very difficult 2015, the leading French pig meat production company increased pig throughputs by 3.5% to 5.7 million head. This increase in activity pushed the cooperative to create 244 new jobs, reaching a total of 5,300 staff. Although the financial result of €5 million was lower than in 2014, investment reached €57 million compared with €44 million in the previous year. Despite lower feed prices helping reduce costs, producer margins remained negative over the year. Good news came from exports with Cooperl exporting 35% of its production. Cooperl is planning to develop its production of antibiotic-free pigs with a short term objective of reaching 20% of their total production in 2016 with the longer term objective of reaching 100%. They also wish to continue the supply of non-castrated pigs, 90% of production, and will look at helping reducing production costs by €20 per pig to compete on a global market.

Country of origin
The country of origin labelling of meat included in processed products is about to be tested in France. The French federation of charcuterie processors (FICT) is prepared to accept a voluntary scheme and today, and according to Inaporc, 75% of the volume of charcuterie products would mention the country of origin of the meat. However, if the scheme becomes compulsory, will consumers accept the extra cost, which are estimated at between 20% and 50% by EU Commission. Fleury-Michon has already announced they will mention the country of origin on their products and Cochonou, (Aoste group) will only use French pig meat for their “saucissons” (dry sausage), this should represent an additional cost estimated between 4% and 6%.

Markets
Pork: Fluidity continues on the French market and helps to underline the decrease of 300 grams in the average carcase weight. At 93.9kg, the average is at its lowest since last September. This, combined with regular demand from abattoirs, resulted in the 56 TMP base price increasing by €c1 at Plérin last Monday.
Piglets: According to Le marché du porc Breton, sales from at pork butchers reamining fluid helping to support the piglets market. Last week, FNP-Coop de France indices increased by €c14 for 25kg weaners and increased by €2.89 per head for 8kg piglets.
Cuts: Since January, French production has been relatively high and broadly sufficient to meet the prevailing moderate demand. According to Agreste, France imports, in the year to date, have fallen by 10.5% compared with year-earlier levels. Decreases have been recorded from Spain, down 9.3%, Germany, down by 22.5%, and lower shipments from Belgium, easing by 17.1%.

Spain

Jorge and Juià are fast developing
Grupo Jorge is now the second largest pork processor in Spain, with a volume of 371,000 tonnes, which represents a bit less than 10% of Spanish production. The three meat complexes in Aragón benefited from investments of €8.7m in 2014 and €25m in 2015. What is remarkable is that the company only processed 227,000 tonnes in 2013. Jorge is now also the largest exporter of Spanish pork with €424m, representing 16% of Spanish pork exports. According to the same survey, Grupo Càrniques de Juià from Girona is the second most aggressive group in Spain and now the fourth largest with an output up from 187,000 tonnes in 2013 to 257,000 tonnes last year. It exported €285m worth of pork in 2015. Meanwhile, Incarlopsa has pledged to invest €35m in its Tarancón plant to increase the speed of the slaughter line to 600 per hour with the help of an additional 500 staff. We reported last week on the investment of €30m by Valls Comaponys in Cinco Villas. (Source, Alimarket)

Consumption in 2015
It is interesting to note that, despite contradictory reports, according to balance sheet calculations, apparent pork consumption amounted to 2.755m tonnes in 2015, the second highest level after 2.877 in 2007 when the population was slightly larger. Fresh pork represented good value in 2015 and sales increased by 1.83% in volume. (Source, Alimarket)

Exploiting China’s potential
Miquel Alimentación recently acquired by Bright Food of China is talking to 300 suppliers for potential business with China. Miquel is active in retail, cash and carry as well as food service distribution. The firm wants to strategically develop towards Horeca in Spain. (Source, Alimarket)

Tönnies in Spain?
We discussed some time ago the possibility of Tönnies taking a foothold in Spain. Well-informed Alimarket magazine reports that the German leader is negotiating the acquisition of the main abattoir in Teruel in La Mata de los Olmos. Also news from Teruel, the Jiloca co-operative (Ceji) may reopen the Calamocha abattoir closed in 2012. (Source, Alimarket)

American offensive
The dynamic Spanish exporters are ramping up their activities in the Americas. Numerous processors are involved in Canada, USA, Mexico, the Dominican Republic, Colombia, Chile, Brazil and Cuba. In particular, Cárnicas Villar has reached supply agreements with Walmart for the USA and Cosco for Mexico while Gourmet is now supplying Walmart. Some companies are opening sales offices, others such as Noël and Espuña are opening processing plants. In 2015, Spain exported 132,000 tonnes of processed pork products, worth €803m. (Source, Alimarket)

Canada

Ratification of TPP Important for Pork Producers in Canada and US.
Last October the 12 nations negotiating the Trans-Pacific Partnership free trade agreement announced an agreement in principal, the deal now must be ratified by the governments of those countries. Last week representatives of Manitoba Pork travelled to Des Moines, Iowa for World Pork Expo and the opportunity to discuss a number of issues of mutual concern. These include, trade, foreign animal disease control and pork industry expansion with their US counterparts and to gather information on the latest available technology. George Matheson, the Chair of Manitoba Pork, says exports are vital to the pork industry and the TPP offers an excellent opportunity. (Source. Farmscape Online)

Brazil

No joy for pig producers
Despite the fall of the Real and rising pork prices, pig producers are still not breaking even due to the higher price of corn of soy. (Source, Brazilian Agrobusiness News)

Mexico

More Foreign Direct Investment for Yucatan
The Mexican consortium Grupo KUO, will invest US$500m over the next five years, from this, US$300m has already been invested in pork production. Pork production accounts for almost 25% of KUO’s turnover. (Source, Various)

China

Respite on the price front
For the first time since the New Year, Pork prices fell by 0.7% to RMB26.94 per kg (£2.89 /kg) but remain historically near record level. (Source, CNAgri)

Majors grow
In contrast with the domestic shortage of hog sources, the sales volume of five listed pig producers, Wens, Muyuan, Zhengbang, Truein and Tech-bank, reached 9.766m head between January and May 2016, increasing 22.74% year-on-year; the respective slaughter was 6.8m head, 881,000 head, 1.11 million head, 823,300 head and 148,700 head. This represents 4.1% of Chinese slaughter. These producers are hugely profitable and keen to expand despite capital and environmental restrictions. Wens has recently declared that it wants to account for 10% of Chinese pig production in the future, which looks achievable. The above number show the wide difference between Wens and the rest. (Source, CNAgri, own)

Taiwan

Pork traceability system to help consumers
The Council of Agriculture has developed a pork traceability system for traditional market vendors, which will enable consumers to trace the source and production chain of pork (Source, TaipeiTimes)

Korea

New concept in food e-commerce
Kurly Market sells a limited range of organic and premium food (about 1,300 lines) on the web. This includes dry aged beef and antibiotics-free pork, both best sellers. The company started trading three years ago. It has an interesting Internet site with a lot of recipes and does a lot of more in product presentation than normal sites. Importantly, Koreans back from work (they work long hours!) can order before 11pm and have the food delivered at their door before 7am. Internet food sales represented only 3% of total food sales in 2015, this is due to increase to 11% by 2020. This year, the retailer plans a volume of 20,000 orders per day. See www.kurly.com - https://vimeo.com/139947899 (Source, Kurly)

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