Pork processors in the EU have enjoyed a buoyant 2017 so far, as pork prices have reached the highest levels since 2013, according to research from Rabobank.
Tighter supply combined with high demand has reportedly contributed to ascending prices, while pork processors in the continent were benefitted by the emergence of new dynamics in the global pork trade.
The recently announced trade pact with Japan, which offers Europe’s pork industry a significant opportunity to increase exports to the country over the coming years, is thought to have contributed to strong confidence in pork prices.
Rabobank expects prices to reach their peak during 2017’s third quarter, at 12% up year-on-year, but it anticipates that sales will soften towards the year’s end.
Production is also forecast to fall for the full year, reflecting the reduction in the herd recorded during 2016.
In addition, export levels to key Asian markets, including China and Hong Kong, might cause concern having declined 15% year-on-year, as the current high prices in Europe make the market less competitive.
More specifically, Europe’s largest pork market, China, has seen the share in its total exports dive from 72% in the first five months of 2016 to 65% in 2017.
Justin Sherrard, global strategist in animal protein at Rabobank, said: “Supply chain stability and product assurance have again seen Europe’s pork industry remain stable where some others have faltered.
“Japan is the second largest destination for EU pork exports, so the agreement of the partnership should spell more good news for suppliers. Exports to the country have grown steadily in recent years, and in the face of Russia’s announcement of further sanctions, will be welcomed by the industry.”
This story was originally published on a previous version of the Meat Management website and so there may be some missing images and formatting issues.
