UK supplies reducing due to improved balance of trade
Domestic production growth is expected to draw back in the second half of 2016, although still be ahead of 2015 levels.
However, a shift in the balance of trade, with imports down against increasing exports, should reduce available supplies over the coming months. These are just some of the conclusions of the latest AHDB forecasts, published today.
The UK’s pig meat production is expected to increase for the seventh consecutive year, based on productivity growth being the driver for the increase rather than a rise in breeding herd numbers. Heavier weights will also assist production gains, although it is forecast that weight gain rates will begin to slow. Therefore, production growth is forecast to continue, although the rate may be slower than the previous year.
The balance of trade looks set to improve, given the weaker pound following the Brexit vote and strong Chinese demand supporting exports. Imports are also expected to fall, with the weak pound and accelerating EU price eroding the UK price premium, coupled with a tightening of supplies on the continent. This shift in the balance of trade is forecast to offset any increases in production, and therefore it is projected that supplies available for domestic consumption will be down on last year’s levels. This could mean that prices continue to strengthen in the second half of the year, as they have done in the second quarter of 2016.
To read about the forecasts in more detail, click here
Vikki Campbell, Senior Analyst
Vikki.Campbell@ahdb.org.uk, 024 7647 8741