Growth in Spanish pig meat exports stalled
Spain has emerged as a key pig meat exporter since joining the EU, with especially strong growth in shipments between 2014 and 2016, but this has come to an end so far this year.
The fall in Spanish exports so far in 2017 is due to a combination of factors, including only a marginal increase in pig meat production, good domestic demand helped by increased tourism, increased pig prices and a downturn in Chinese demand.
Exports of fresh and frozen pork by volume were down 2% in the first half of 2017 after an increase of 27% in the equivalent period last year and 18% in 2016 as a whole. At the same time the average export price was up by 20% on the year from January – June in euro terms, partly due to increased pig prices in Spain and the EU as a whole. As with most other EU exporters, it was the downturn in the Chinese market that was the main factor behind the fall in volumes, with trade down by 25% on the year during the first half of 2017. In addition, there was a small fall, of 3%, in exports to France that is now once again Spain’s main market for pork. In contrast, there was further marked growth, of 16%, in shipments to the UK in spite of the weaker sterling. Chilled cuts, led by boneless, account for two thirds of trade with the UK.
The increase in Spanish pig slaughterings and production was less than 1% on the year in the first half of 2017, as the supply of pigs has become more stable. Spain has also reduced its exports of slaughter pigs to Portugal, which would also suggest supply is more balanced with demand.
The short-term outlook for the Spanish market looks difficult. Spain suffered from an exceptionally hot summer, slowing down the finishing of pigs and lowering carcase weights. This is now changing with increased supplies of pigs coming forward, given cooler weather at a time when demand is starting to suffer from the end of the main tourist season. Assuming the Chinese market remains more difficult, this is likely to put pressure on Spanish exporters to supply more to the EU market, including possibly the UK. The Spanish census for May has yet to be published but it is probable that pig numbers are now increasing given the good profitably since the middle of last year.
Leo Colby, Consultant