MLC fears price gap could trigger a downturn Defying the rule of rising prices Pork and some pigmeat products may be partial exceptions to the rule of rising prices' in 1999, at least in the unpublished opinion of some MLC staff. Milton Keynes analysts are uncomfortable with the wide gap between UK and continental pig prices, suspecting it could be a brake on market recovery here or even trigger a temporary downturn. Unigate's profit warning demonstrates the commercial pressure caused by livestock prices surging while the major retailers try to use import cost as the purchasing benchmark. Other processors and wholesalers report a similar squeeze. Officially, however, the MLC view expressed in its latest Market Outlook bulletin is of prices continuing to rise, with the increase accelerating in the second half of the year. And although imports are predicted to increase "they are not expected to stifle the UK price recovery as Continental prices too are forecast to increase". Driving the market higher is the sharp contraction of the UK breeding herd, which MLC livestock survey results due in the next few days are expected to show continued through the first quarter. By March clean pig slaughterings were 9% lower than 12 months previously, and in the fourth quarter the year on year decline could reach 14%. The Adjusted UK Spec average price is predicted to reach 100p by August and 115p in December. In other words, many producers will be coming back into profit in the summer. But MLC and some other analysts claim this will actually squeeze supply further because banks will use the opportunity of higher prices to liquidate debtor businesses. {{MEAT }}

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