July 24, 2012
Has the Chinese bubble burst? Growth has certainly fallen but remains at a respectable 7.6% which would be the envy of many countries, certainly in Western Europe.
However, concerns regarding debt and the housing price bubble have not abated. Some sectors are expanding fast but others mainly in the marketing sphere have cut investment. Inflation has fallen from 7.7% in 2011 to 2.2% this year, a welcomed relief. Furthermore, the State is responding with strong pro-growth measures such as the cut to interest rates, state-backed loans and injections of liquidity. However, the current package is not of the same order than the huge 2008 boost. In balance, many analysts point out that China remains a cash-rich country and that a soft landing is expected.
However, with the forthcoming rise of corn prices, the price of food and pork in particular are expected to increase markedly.
Good news from UKTI: A two-year pilot will see UKTI appoint dedicated trade officers in Cambodia, Guyana, Mongolia, Mozambique, Papua New Guinea and Turkmenistan. The staff will be locally employed and recruitment is now underway. In Africa, UKTI will work closely with the FCO. Through this collaboration UKTI will be able to offer business support services in Cameroon, Ivory Coast, Gabon, Guinea, Senegal, Sierra Leone and Zambia. No doubt, we will use their services, particularly in Africa.
BRAZIL
Fall of pork exports
During June, Brazil exported 43,913 tonnes of pork worth US$108.4 million. In comparison with June 2011, this was 16.8% lower in volume and 28.8% lower in value, according to the Brazilian pork producers and exporters association, ABIPECS. (Source: ABPIPECS)
CHINA
EU-China agreement on agriculture cooperation
The agreement shows some progress on mutual recognition of organic standards and geographical indications. However, the main part of the deal can be resumed as EU help to China on environmental matters, animal health and food safety and it is highly debatable if the EU has the financial means and can justify helping a richer country. The EU and China have set up a Task Force on Food, Agriculture and Biotechnologies in 2011. (Source: EC)
Ireland shows lead
Minister of Agriculture and Food Simon Coveney has opened a new "Ireland-China Food Hub" which will be managed by Bord BÃa, the Irish Food Board.
DENMARK
Market
On the European markets, there is stable demand for legs, front parts, loins, collars and tenderloin. The British bacon market is stable as well. On third country markets, there are fine orders from Russia, whereas China has slowed down due to large numbers of domestic slaughterings. Japan remains stable. (Sources: Danish Crown, Tican, Danish Food Council).
Danish Minister for Food wants to improve animal welfare
The Minister for Food, Mette Gjerskov is not satisfied with animal welfare standards in Denmark. According to a report from the Department, the inspection of 402 pig production sites revealed failures in 205 herds of pigs. 277 reminders, 111 orders and 144 police reports were issued. Although this represents a decrease by 18, 36 and 8% respectively animal welfare must still be improved. According to Gjerskov, basic animal welfare regulations are often being violated. The Minister also advises that in case of the industry failing to comply with the regulations, stricter regulations on animal welfare might be introduced when Parliament negotiates a new veterinary agreement this autumn. (Source: JyllandsPosten)
Pig herds to grow
It is no news that the Danish pig herds are continuing on their growth trend. However, new figures from the Danish Food Council are now showing how fast the upwards trend has developed over the last few years. Today, almost 3/4 of all pigs produced in Denmark are from herds producing more than 5,000 pigs annually. Twenty years ago, this figure was less 10% and ten years ago, it was a little more than 1/3. During the last twenty years the number of producers decreased from approximately 32,000 to just above 4,000. (Source: Landbrugsavisen)
Piglets
Danish exports of piglets have increased by 15% to 3.8 million during the first five months of the year. These high numbers result in the fact that Danish Crown and Tican are short of approximately 5% of their raw material supplies. The exported piglets might potentially create added value and jobs in Denmark, informs chairman of Danish Crown, Erik Bredholt. CEO of Tican, Ove Thejls expressed concerns about possibly being unable to get sufficient numbers of porkers to use the slaughtering capacity. At Tican now and then slaughterings have been abandoned on Fridays. Many pig producers who produce both piglets and slaughter pigs have chosen the safe solution of selling at a higher price to Germany rather than trying to make a profit on slaughter pigs. According to Ove Theijls it might even be that their banks have urged them to do so. Thejls also stressed that sellers must understand that when foreign buyers pay well for piglets it is in anticipation of increasing prices on porkers. (Source: Borsen)
|
Danish Slaughterhouses - payments week commencing July 16 2012 | |
|
Slaughterhouses |
Danish Crown and Tican |
|
Slaughter pigs (70.0 - 86.9 kg) |
Euro 1.506 |
|
Difference to last week |
Unchanged |
|
Sows (Above 129.9 kg) |
Euro 0.970 |
|
Difference to last week |
Unchanged |
FINLAND
Meat more expensive
Prices for meat in Finland have increased by 9% during the first five months of the year. At the same time meat production has decreased by 6%, according to figures from the Finnish Farming Department. The decrease in meat production has lead to imports of pig meat having increased by 52% to approximately 5,000 tonnes. (Source: Landbrugsavisen)
FRANCE
Innovation
Aoste is launching the first re-sealable box to pack dry ham. A quarter of a dry ham or a 250 g cut is pre-sliced and packed in this new box which can be closed and reopened as many times as necessary. Two references will benefit from this innovation: Aoste standard dry ham and Serrano (Aoste Selection) ham.
Net margins
The French federation of trade and distribution (FCD) has just published net margins per category for French retailers (except Leclerc and Intermarché who are not members of FCD). As far as charcuterie products are concerned, the gross margin is 31.3%, overheads are estimated at 25.2% including 6% of in-store labour. Therefore, the net margin is 6.1%.
Take-over
CA Traiteur & Salaisons has recently purchased TLC, located near Rouen. The company manufacturing and distributing regional specialities had a turnover of €15 million. This move will allow CA Traiteur & Salaisons to extend their activity in the supermarket sector where they only complete 25% of their turnover.
Pigs
The rise in prices of last Thursday was justified according to the stability for the basic 56 TMP price (-0.4 cent). There is a status quo for almost all the European prices. According to the "Marche du porc Breton", "the situation is fluid, the offers make the price". In the big cities sales are slowing down but activity is better in the holiday areas. The weather is set to improve and will contribute to the improvement in the demand for seasonal cuts.
Piglets
France does not escape the seasonal slowing down of the European Market. Prices are stable or slowing down slightly. The FNB-FNCBV prices did move a lot last week: +1 cent for 25 kg and + 16 cents for post weaning.
Cuts
Sales are waking up in the holiday regions where a wave of consumers is expected and also due to nicer weather.
|
Pork prices RUNGIS week commencing July 16 2012 | |
|
Cut name |
Price range (Euro/Kg) |
|
Back fat, rind-on |
0.65 |
|
Trimmings |
1.53 |
|
Leg |
2.19 |
|
Loin including chump |
2.88 |
|
Loin excluding chump |
2.65 |
|
Belly extra without trimmings |
2.51 |
GERMANY
Market
The trade on the meat wholesale markets is sluggish and profits are reported to be below average. The holiday season and poor weather conditions still lead to subdued demand. Hams, chops and loins are marketed with difficulties and so are collars. Articles for exports such as fat or bellies are sold on a slightly more stable basis. Processors are complaining about disappointing business too, mainly with regards to barbecue products. (Source: AMI)
Merger approved
The merger between the German SARIA and Danish Daka has been approved by the EU Commission. As a result, SARIA holds the majority of the new company Daka Denmark with 51%.The remaining 49% are held by a number of previous owners of the cooperative Daka. (Source: Danish Crown)
|
Pork prices Hamburg Market Week commencing July 16 2012 | |
|
Cut name |
Price range (Euro/Kg) |
|
Round cut leg |
2,10/2,25 |
|
Leg (boneless, rindless max fat level 3mm |
2,90/3,10 |
|
Boneless Shoulder |
2,30/2,45 |
|
Picnic Shoulder |
1,95/2,10 |
|
Collar |
2,55/2,70 |
|
Belly (bone in, ex-breast) |
2,15/2,30 |
|
Sheet Boned Belly (rindless) |
1,85/2,15 |
|
Jowl |
1,30/1,40 |
|
Half Pig Carcasses U class. |
2,02/2,12 |
NETHERLANDS
Downward pressure on prices
Vion has lowered its base price to €1.58 in response to lower demand in Northern Europe due to the holiday period. Temperatures in Southern Europe are deemed too high to encourage pork consumption. The price of weaners has also falling to €31 from a high of 40 two months ago (Source: Boerderij Vandaag)
Bleker: no grace period for pig breeders
In a speech to the Second Chamber, State Secretary Henk Bleker is categorical: all sow units must be converted to loose housing by 1 January. Those which do not comply will be closed. (Source: Boerderij Vandaag)
RUSSIA
Antibiotics
While other countries are working on reducing the use of antibiotics in animal feed, Russia expands its production of prophylactic antibiotics. During Q1 2012 some 8.500 tonnes of these antibiotics were produced in the country, which is a significant increase of 46.6% compared to the same period in 2011. According to AgroRu.com, a total of 47.400 tonnes of prophylactic antibiotics were produced in Russia in 2011, which represents an increase by 3.5 times compared with 2010 figures. However, 86% of the total of 327.000 tonnes annual domestic demand is imported. The value of those imports is said to have exceeded €81.2 million last year. Among the main suppliers are CEVA Group, Invesa Group, Krka D.D. and Pfizer Animal Health. (Source: topagrar)
ASF
Rosselkhoznadzor confirmed six new cases of ASF in Tverskaya oblast. The virus was found in meat samples taken from wild boars and domestic pigs. Rosselkhoznadzor claims that the owners of the pigs are guilty of spreading ASF as they slaughter pigs that should be confiscated within the framework of anti-ASF measures, and then sell the meat on the market.The infected animals were registered in private households.(Source: Meatinfo.ru)
Imported Pork Moscow Market (July 17)
Shoulder (no bone): US$5.26/kg
Leg (no bone): US$5.4 /kg
Liver: US$1.60/kg (Source, Meatinfo.ru)
Imported Pork St.Petersburg Market (July 17)
Neck (no bone): US$6.43/kg
Liver: US$1.54/kg (Source, Meatinfo.ru)
SPAIN
Export-focused companies are expanding
Marfriges the pig abattoir and cutting plant of Sant Vicenç de Torelló (Barcelona) is investing €2 million this year with new packing machines and increased freezing capacity. The company that counts 235 staff slaughters 15,000 pigs per week for a total volume of 56,700 tonnes and a turnover of €109.7 million (42% export). It is also taking a 25% participation in feed mill Piensos Compuestos Victoria. Meanwhile, Embutidos Ortiz is investing €1.2 million in a new 3,000 sqm plant. The company specialises in dry-cured sausages and chorizo from La Rioja and aims to produce 3,000 tonnes of product per year. It exports 50% of its production. Comapa the dry-cured ham processor from Trevélez is investing €2 million to increase its capacity to 800,000 pieces of 'white' and Iberian hams, much of which is sold sliced. It made a benefice of €2.3 million in 2011-12 on a turnover of €70 million, a very creditable performance. (Source: Alimarket)
Julián MartÃn is adapting to new market conditions
The Iberian product specialist from Guijuelo has shrunk its own farm from 15,000 pigs to 2,000 and is reducing its production and turnover by 13% to €33 million. It claims to have reduced its costs whilst slightly increasing its prices. It produces 4,200 tonnes of products, 70% of which are sold to supermarkets such as El Cortes Inglés and 5% are exported. The company also owns the Barrancarnes processing plant and the abattoir Maporal in Portugal which produce the famous Iberian Porco Preto products. (Source: Alimarket)
|
Pork prices Barcelona Market Week commencing June 16 2012 | |
|
Cut Name |
Price range (Euro/Kg) |
|
Carcases (secondary grade) |
1,816/1,822 |
|
Gerona Loin Chops |
2,60/2,63 |
|
Loin Eye Muscle |
--/-- |
|
Spare Ribs |
2,93/2,96 |
|
Fillets |
5,38/5,41 |
|
Round Cut Legs |
2,47/2,50 |
|
Cooked Ham |
2,13/2,16 |
|
Rindless Picnic Shoulder |
1,66/1,69 |
|
Belly |
2,20/2,23 |
|
Smoked Belly with Spare Rib Section Cut off |
2,63/2,66 |
|
Shoulder chap or Head Jowls |
1,23/1,26 |
|
Back Fat |
1,08/1,11 |
UKRAINE
More pigs
According to the the State Statistics Service of Ukraine, during January-June 2011 pig numbers in Ukraine increased 7.9% compared to the first half of 2011 and amounted to 2,642,500 pigs. The largest growth was registered in the territory Donetska oblast with 426,100 pigs. The mortality of pigs of different ages during the indicated period was 238,300 pigs which is 9.5% less than during the same period in 2011. (Source: PigUa.info)
Another increase
The number of pigs sold between January-June 2012 increased by 5.7% compared to the same period in 2011. According to the State Statistics Committee the volume of sold pigs in live weight was 196,300 tonnes. The average selling price of pigs during the period was UAH 16,034/tonne which is 31% higher than during Jan-June 2011. The sale of pigs to the processing plants amounted to 113,600 tonnes. This represents 57.9% of the total sales volume. (Source: PigUa.info)
UNITED KINGDOM
Another company to close in Scotland
The Freshlink Foods sausage business in Shettleston, Glasgow is following Halls and has announced it is terminating its operation. The company employs nearly 200 people and is owned by ABP Convenience Food Division. This reflects toughening competition in the sausage sector and is partially a consequence of the takeover of Turner. (Source: various)
USA
Exports going from strength to strength
In contrast with Brazil, US pork exports in May amounted to 150,235 tonnes, up 8.2% on a year ago. Mexico and Japan still account for 46% of exports despite a marked drop of volumes to Japan of more than 22%. However, exports to China have doubled to 22,000 tonnes. Exports to Canada are also up 14%. (Source: USDA)
VIETNAM
Pork unsafe
Some 4.4% of pork samples were found to contain beta-antagonists according to a joint survey by the Ministry of Agriculture and the Ministry of Livestock Development. These feed additives were used between 2000 and 2002 and banned thereafter. Only two farms have been convicted so far but the sanctions are not deemed dissuasive. (Source: Porc Magazine)
US$1 = EUR0.65 (July 24, 2012)
