EU pig prices under pressure
The EU average pig reference price has now been falling for six consecutive weeks, with the current figure the lowest since February.
For week ended 14 October, the average price stood at €138.77/100kg, well below the average for the year to date. This is also €13 below the price a year ago, although the gap has been narrowing as prices were falling back at a faster rate this time last year.
Interestingly, six weeks earlier, the price had averaged over €151 which is the highest quote of the year. However, this could not be sustained. EU pig supplies remain relatively large while consumer demand is reported to be only average for the time of year, and hence the market has been pressured. Demand on export markets is also reported to be lower than expected, and of course the potential for African Swine Fever to spread remains a cause for concern.
Most major producers have recorded falling prices over the past month, though the drop has generally been more severe in southern member states. Spanish prices dropped by €15/100kg in the four weeks to 14 October, while the Portuguese and French quotes were down by €12 and €8 respectively. Further north, prices in Denmark and the Netherlands were only around €5 lower over the same period, although German prices did fall by more (-€9). With the presence of ASF in its wild boar herd, prices in Belgium were particularly negatively affected and weakened by over €18 compared to 4 weeks before. Although, in more recent weeks they seem to have stabilised.
With some recent strengthening of the pound against the euro, and less dramatic declines in UK prices, the gap between UK and EU reference prices has widened to €27/100kg (24p/kg) in the latest week. This is a larger gap than for most of the year so far, and is also high by historic standards. Hence, UK product may be experiencing tough competition from the continent at the moment.
Bethan Wilkins, Analyst
email@example.com, 024 7647 8757