EU pig prices starting to edge up
In early May, the average price of pigs in the EU fell, continuing the trend seen since mid-March. However, in the past two weeks, prices have started to increase again.
In the week ended 27 May, the average price reported to the EU Commission was just over €143/100kg, up €2.34 on the previous week, and just under €0.50 higher than four weeks earlier. Nonetheless, stronger increases in prices in May 2017 mean the gap compared to last year has increased to around €33/100kg.
In sterling terms, prices gained 0.5p/kg compared to the level recorded four weeks earlier. However, some weakening of the pound against the euro means the discount compared to year earlier levels is smaller, at 27p/kg.
Prices had been falling as subdued demand, particularly for export, has been limiting purchases from processors. Supplies had also been ample, however in recent weeks this is now reported to be falling. The tightening supply, and the beginning of the holiday season which should improve demand, has enabled prices to begin recovering in recent weeks.
Germany and the Netherlands recorded the largest price rises among the major producers in May, climbing around €1.50/100kg and €2.00/100kg respectively in the most recent week, compared to four weeks earlier. Prices in Spain and Poland were both up around €0.50/100kg, while quotes in Denmark and France were stable. Prices in all major producers were over €25/100kg lower than the same point a year ago, with Poland recording the largest decline of almost €38/100kg.
The UK made one of the largest price gains in EU over the past four weeks (+€2.71/100kg), to stand at €167.56/100kg in the week ended 27 May. As such, the premium received for pigs in the UK has generally increased over the last month, averaging €25/100kg compared to €21/100kg in the four weeks prior. The gap is now slightly larger than the five-year average, and €14 greater than year earlier levels. Unless the upward momentum in the EU price picks up, the increased price competitiveness of European pork could limit the level of UK pig prices in the coming weeks.
Bethan Wilkins, Analyst
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