Markets suspect uncertainty will persist
Brussels points to price uptrend
European Commission officials claim to be confident a sustainable uptrend in EU pig prices is under way, despite signals from the markets suggesting uncertainty will persist well into the winter and tighter supply will not become apparent until next year.
"This is not just a seasonal fluctuation but a real improvement," said a Commission pigmeat market expert, who pointed to sharply higher year on year prices as justification for suspending the private storage subsidy scheme on September 13 and formally closing it four days later.
On average EU prices have recovered by about 30% from the very low levels of a year ago. But the Commission's own statistics show the overall market has softened since mid summer and available census and slaughter data do not yet offer conclusive proof of a cylical swing towards tighter supply and higher prices.
Many independent analysts suspect ending the storage aid programme, which was designed to harden prices by taking product out of the market, will create new downward pressure.
More than 400,000 tonnes have been taken into store since the scheme started last November and only a very small proportion of this tonnage has been exported or absorbed back into the domestic market.
l Overshadowed by news of the EU pigmeat storage subsidy being suspended was another potentially price weakening move by Brussels officials. They have cut subsidies on pork exports to Russia. Improving trade conditions were given as the reason, though market rumour is of budgetary pressure.
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