Low production adds support to EU pig prices
In the week ended 18 August, EU pig prices continued to rise to a multi-year high at €180.06/100kg. This was €7 higher than at the beginning of August.
European production has been lacklustre, particularly in Germany, Europe’s largest producer, which has helped support prices. Growth in Chinese demand also seems to be re-emerging; Chinese wholesale pork prices are now in excess of 30RMB/kg, (€3.78), up from around 20RMB two months ago.
However, the market signals are not wholly price supportive. Demand has been reported to be lower than expected across much of Europe, particularly the north. Processor margins are reported to be suffering, caught between a scarcity of pigs and weaker demand. This may affect the sustainability of price rises, especially if production starts to pick up. Companies with access to China are likely to be in a more favourable position.
Reference prices in selected key Member States moved as follows in the four weeks to 18 August:
- Belgium: +€12.3 to €157.70/100kg
- Denmark: -€0.3 to €168.88/100kg
- France: +€4 to €168.00/100kg
- Germany: +€10.7 to €191.32/100kg
- Netherlands: +€13.4 to €171.78/100kg
- Poland: +€5.9 to €177.28/100kg
- Spain: +€0.5 to €181.64/100kg
- UK: -€3.0 to €166.37/100kg
On average, EU pig prices have continued to extend their premium to UK prices during August, and were over €13/100kg higher in the latest week. Some weakening of sterling against the euro over the past month has influenced this. If European prices remain strong, then the SPP would normally be expected to follow, but only at its own pace.