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European Pig Trade Helped by Tighter Supplies

by 5m Editor
15 June 2010, at 11:53am

EU - While European pig prices are back by three per cent on a year to date basis, there have been signs of improvement over recent months.

Following strong pressure during the first quarter when reasonably strong supplies combined with slower demand affected trade.

The four key producing member states, Spain, Germany, Denmark and France account for half of European production. Figures from Eurostat indicate pigmeat production for these countries combined was virtually unchanged at 3.16 million tonnes for the first quarter this year. Prices since the second quarter of 2010 have improved in the key producing countries such as Spain, Germany and Denmark in response to lower supplies compared to the corresponding period last year. Prices have also risen on the French market, albeit at a slower pace.

The greatest fall in supplies has been evident in Spain reflecting the the continued fall in breeding herd, with the latest November census showing a drop of 4 per cent in the breeding herd at 2.4 million head. Spanish pigs marketed this year will fall considerably as the number of piglets recorded in the census fell by 7 per cent to 6.6 million head.

According to Porkinfo, part of the reason behind some of the lift in Danish prices is linked to the strengthening live trade, especially to Germany where processing costs are lower. Another factor helping pigmeat trade is stronger demand from outside the EU. The pig crop in Northern America (America and Canada) is expected by the USDA to fall by 3 per cent to 35 million head this year.

Import demand from Russia for the first quarter of 2010 has risen by around 8 per cent to 101,000 tonnes. While import demand was reportedly somewhat slower for the major Asian importers like Japan and South Korea to date this year. However this slight slowdown in trade has been offset by favourable exchange rate movements over the past few months for EU exporters into the Asian region.