A weak pound and tightening domestic output could potentially cut the supply of pork available in the UK, the National Pig Association has warned.
The trade body’s CEO Lizzie Wilson warned 25% of the national sow herd could be lost “by the time the dust settles” on a turbulent 18 months for the sector, with producers likely to “continue exiting the industry” due to soaring costs, causing the UK’s pig meat output to drop as a result.
“Domestic production of pig meat was forecast to fall 6% by the end of 2022,” said Freya Shuttleworth, dairy and livestock analyst at levy board AHDB, in a report published last week.
Shuttleworth said the falling domestic supply “would further tighten supplies to the market” and warned “imports could be lower than expected as they become more expensive”.
Although Europe was “awash with excess pig meat looking for a home” according to Wilson, a weak pound would likely mean costlier imports and a struggle to meet even falling demand in an inflation-wracked economy.
The UK imported more than twice as much pig meat in volume terms as it exported in the first seven months of the year, according to official trade statistics collated by AHDB, which showed year-on-year imports up by 19% for the period.
And while the pound recovered somewhat this week after a record fall against the US dollar, any lasting depreciation, particularly against the euro, could be damaging, with much of the UK’s growing overseas supply coming from Denmark, Germany and the Netherlands.
At the same time, a weak pound could help fuel a recent exporting revival, with the AHDB analysis showing overseas sales recovering to near pre-Brexit levels.
HMRC data for July meant exports for the first seven months of the year were 9% higher than the same period last year and “almost level” with what was recorded in 2020, Shuttleworth said.
“After contracting in 2021 in the aftermath of Brexit, export volumes of bacon and processed pork have increased to pre-pandemic volumes whilst sausages returned to 2020 levels. Trade lost from China has mainly been absorbed by the EU, bringing its share of exports back to pre-Brexit levels,” she explained.
China has been rebuilding its colossal domestic pork sector, at the expense of imports, after relying on foreign supply, including from the UK, during a long battle with African swine fever.
AHDB said UK pig meat sales have increased to large markets such as the Philippines, a 7,000-island archipelago that is home to around 100 million people The US imported 74% more British pig meat than it did during the January-July 2021 period, helping offset the impact of Beijing pulling down the shutters on foreign suppliers.
