EU pig prices: Germany strengthens, while UK dips
August has been a month of two halves for the EU average pig reference price.
At the start of the month, prices were still drifting downwards, falling to €143.36/100kg in week ended 5 August according to data reported to the European Commission. However, by the week ending 19 August, prices had risen by over €6, to €149.77/100kg. Compared to 4 weeks prior, the measure therefore currently stands €4.66 higher. Due to the recent price increases, the discount compared to 2017 has been narrowing, and currently stands at around €21/100kg.
Looking at individual member states, pig prices in Germany have increased strongly, reaching €156.58/100kg in the most recent week. This is €9.36 above the four weeks previously, with all the increase again coming within the past fortnight. Belgium, Poland, the Netherlands and Austria have also recorded a similar pattern of increase.
In Denmark, prices have only received a modest boost compared to that recorded in Germany, moving up by just €1.84 over the past 4 weeks, to €129.96/100kg. Prices in Spain, also recorded little change during the period, up just €0.96 at €153.12/100kg, and French prices have similarly only risen slightly.
The price rises in continental Europe are reportedly due to tight supplies at slaughter. While the German herd has been declining, previous census results from other member states indicate overall there should be plenty of pigs on units. As such, it is perhaps uncertain how long the upward momentum can be maintained. The ongoing African Swine Fever situation in China is also reportedly bringing some optimism to the market, with the potential for an uplift in import demand. This is highly uncertain however, and will depend on both the attitudes of Chinese consumers and strategy of the Chinese government.
Conversely, UK prices have declined over the latest four week period, falling €2.45 to €165.69/100kg. The pound has very slightly weakened over the past four weeks, and therefore the decline is smaller in sterling terms (-1.4p) with the figure averaging 148.19p/kg in week ended 19 August. With the UK reference price and EU reference price diverging in trend, the gap between the two figures has narrowed significantly, to just over 14p in the latest week. This is the smallest difference since March, and lower than the five-year average. This is perhaps positive news for UK producers, increasing the relative competitiveness of domestically produced product. It remains to be seen, however, if this translates into any price support in the coming weeks.
Rebecca Oborne, Analyst
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