Mike Ingham
Retailers are likely to find themselves under continued fire from British pig farmers this year. Latest EC forecasts suggest the price disparities between imported and home produced pork and bacon are likely to persist.
Optimists had been hoping tension in the trade would ease with a cyclical downturn in pigmeat production on the Continent and a modestly increased output from the domestic industry.
Earlier in December there was some evidence pointing to price convergence. However, the new forecasts published by the Commission indicate there will be only a negligible decline in total EU pigmeat production next year.
Sharp falls in the UK and the Netherlands along with minor reductions in France and Denmark pale into insignificance against the resilient output from the huge Spanish and German pig industries.
The Brussels analysts estimate EU production will remain comfortably above 17 million tonnes, only a slight decline of around a couple of hundred thousand on last year. And this drop in output might be partly cancelled out by a reduction in export demand, which usually absorbs at least a million tonnes of EU production.
Traders expect Japan to buy strongly again, but Russia is posing problems and Brazil is becoming a serious competitor.
The implication for buyers in the UK is the likely persistence of relatively cheap imported product while domestic supply remains very tight.
The MLC is also still predicting further contraction in the UK breeding herd, leading to particularly sharp drop of 7% in domestic pork supply next year.
{{MARKET EDGE }}
Retailers are likely to find themselves under continued fire from British pig farmers this year. Latest EC forecasts suggest the price disparities between imported and home produced pork and bacon are likely to persist.
Optimists had been hoping tension in the trade would ease with a cyclical downturn in pigmeat production on the Continent and a modestly increased output from the domestic industry.
Earlier in December there was some evidence pointing to price convergence. However, the new forecasts published by the Commission indicate there will be only a negligible decline in total EU pigmeat production next year.
Sharp falls in the UK and the Netherlands along with minor reductions in France and Denmark pale into insignificance against the resilient output from the huge Spanish and German pig industries.
The Brussels analysts estimate EU production will remain comfortably above 17 million tonnes, only a slight decline of around a couple of hundred thousand on last year. And this drop in output might be partly cancelled out by a reduction in export demand, which usually absorbs at least a million tonnes of EU production.
Traders expect Japan to buy strongly again, but Russia is posing problems and Brazil is becoming a serious competitor.
The implication for buyers in the UK is the likely persistence of relatively cheap imported product while domestic supply remains very tight.
The MLC is also still predicting further contraction in the UK breeding herd, leading to particularly sharp drop of 7% in domestic pork supply next year.
{{MARKET EDGE }}
No comments yet