August 7, 2012

     

BPEX Export Bulletin - July/August 2012 (Week 31)

 

 

Pork export news this week

 

In response to some exporters' demand, pork exports to the United Arab Emirates can now take place under certificate 7074EHC. It is described as "Other meats" due to local sensitivities. Exporters are advised that the possibility of exports without export health certificate remains open as it is the case with Bahrain.

 

Defra has updated the export certificate to South Africa, 7319EHC. This will not affect exporters.

 

Rabobank believes world pork production will fall in 2013 due to high feed prices. Chinese demand should rebound in the fourth quarter. European production is forecast to tighten too although the latest EU forecasts contradict this view and plan for stability.

 

BPEX has made monthly export figures available under: http://www.bpex.org.uk/prices-facts-figures/imports-exports/UKporkexports.aspx

 

The Financial Times published a large article on UK pork exports to China on 27 July.

 

 

Belgium

 

Certus looses QS listing

 

The Belgium quality scheme Certus needs to reapply to the German QS farm assurance scheme as current arrangements expire on 31 December 2012. In 2011, some 87,000 tonnes of Belgian pork was sold under QS in Germany, a third of Belgian exports (Source: Boerderij Vandaag)

 

 

Brazil

 

Export limitations and market failure

 

French Institutes IFIP and ITAVI have published a new report on the Brazilian pork sector. Production and processing remain competitive and the three largest players, Brazil Foods, Marfrig and Aurora account for 56% of output with a high level of production under contract, 90% in the South and 70% in Centre-West. The South still represents 70% of slaughter and 76% of exports, followed by Centre-West with 14% of slaughter and 17% of exports.

 

In the South environmental constraints are rising in areas of high pig density and in other parts of the country, logistics remain problematic. Feed prices are comparatively no so low anymore. Labour costs are increasing fast and the cost of capital remains very expensive. The Real has also appreciated, putting Brazilian exports at a disadvantage.

 

On the other hand, the rise of production has been so far fully absorbed by increased domestic consumption as incomes have exploded. For instance, Brazil ranks as the most attractive retail market in the world according to A.T. Kearney Retail Development Index. Recent data is not so upbeat for domestic consumption of pork as against poultry and beef and this weakness has led to a fall of prices. This, added to poor export performance, has pushed domestic production financially to the brink. The Government has intervened on the market by subsidising slaughter pigs to be sold at a minimum price, a measure costing £10 million and involving 76,000 tonnes of pork. It is also supporting the weaners market and producers directly for a total of market and direct subsidies of £66 million.

 

Pork exports stagnate since 2005 and the over-reliance on exports to Russia has been exposed. The poor animal health control, use of ractopamine, beta-antagonists and Foot and Mouth Disease outbreaks have curtailed access to many well-paying markets. In practice, the booming home consumption of high margin branded processed pork products provides an easier and more profitable outlet for Brazilian pork processors than export.

 

 

Cuba

 

Agreement with Mexico

 

The University of Guadalajara and the Cuban pig research institute (IIP) have signed an agreement of collaboration. Cuba imports 30% of the pork and 80% of the food it consumes. (Source: Milenio)

 

Pork shortage

 

Pork is the most popular meat in Cuba and is particularly consumed for the Christmas period and the summer. However, pork remains scarce despite imports. The opening of Cuba to private enterprises in September 2010 means that people can now produce pork privately. However, this pork is sold directly to end consumers at better prices than they can sell to the State says Norberto Espinosa of Grupo Empresarial Porcino. (Source: Diario Granma)

 

 

Denmark

 

Market

 

The number of slaughtering remains low on the European market. Further, the weather improvement in the Northern Europe results a slightly higher demand. Legs, front parts and shoulders are sold at slightly higher prices. Exports of loins and production meat have improved too. Collars are sold at unchanged prices. The British bacon market remains stable and with the Olympic Games expectations are that exports are going to increase over the next weeks. As to markets outside Europe there is a stable activity to Russia, Japan and China. (Sources, Danish Crown, Tican, Danish Food Council).

 

New Tican subsidiary in China

 

When in 2008 Tican opened a sales office in Shanghai, the ambition was to increase the turnover from 8,000 tonnes to 11,000 tonnes annually. The goal was already exceeded in 2009 when turnover reached 13,000 tonnes. With its subsidiary Tican China, the slaughterhouse now invests further in China. The aim is to create added value for selected customers to some of Tican's products thus increasing exports. (Source: Landbrugsavisen)

 

HK Scan's subsidiary to close

 

After years of struggle, it has now been confirmed that Kreatina A/S will shut down. 22 employees are affected. Last year, employees had voluntarily accepted a cut in salary, hoping to avoid layoffs or a shutdown of the company. Kreatina A/S is based south of Copenhagen and produces cold cuts products for supermarkets and retail chains such as Super Gros. (Source: Dagbladet Koege)

        

Danish Slaughterhouses - payments week commencing 30 July 2012
Slaughterhouse	Danish Crown	Tican
Slaughter pigs (70.0 - 86.9 kg)	Euro 1.533	Euro 1.533
Difference to last week	0.027	0.027
Sows (Above 129.9 kg)	Euro 1.037	Euro 1.037
Difference to last week	0.027	0.027
Sows (Above 129.9 kg)	Euro 0.867	Euro 0.867
Difference to last week	0.027	0.027

            

           

France

 

Rise of feed costs

 

In spite of a very acceptable pig price at €1.461/kg in Plérin, the cash flow of French producers is suffering from increasing feed costs which reached €280 per ton. This price is also expected to rise further with increases of wheat and soya. Following 6 years of crisis and the need to invest to comply with animal welfare rules, the French pig meat industry is in danger. The Regional Pig Committee in Brittany is requesting a price of €1.65 to processors with the objective of reaching €2 within months.

 

Pigs

 

An increase of the basic price at Plérin seems to be possible on Thursday. The availability in breeding is limited in France as in the rest of the EU. Sunnier weather in particular in the zones of holiday resorts is fortunate for the cuts market.

 

Cuts

 

Summer, sunnier weather, offers low…all these things seem good for the market in holiday areas and also for higher prices for cuts. Only the operators in cities have difficulties due to a very low demand.

        

Pork prices RUNGIS week commencing 30 July 2012
Cut name	Price range (Euro/Kg)
Back fat, rind-on	0,65
Trimmings	1,56
Leg	2,25
Loin including chump	3,36
Loin excluding chump	2,28
Belly extra without trimmings	2,65

           

          

Germany

 

Market

 

Due to improved weather conditions demand for pig meat products on the German market is fine. Higher prices can be achieved as the supply is slightly limited and cannot always meet the demand. Most popular products are bellies and shoulders while sales of hams are still rather sluggish though prices have improved. (Source: AMI)

 

Popular Parma Ham

                                

In 2011, 6.5 million packs of pre-packed Parma Ham were sold in Germany. According to the Consorzio del Prosciutto di Parma sales growth of pre-packed Parma Ham has continued during the first half of 2012. Within this period of time, 4.6 million packs were sold on the German market. Global sales for the first six months of the year sum up to 34 million packs. (Source: Lebensmittel Praxis)

         

          

Netherlands

 

Nutreco invests in its research facilities

 

The feed group is spending €1 million to update its research farm in St. Anthonis. In particular, sow stalls will be replaced by group housing. (Source: Boerderij Vandaag)

Poland

 

Exports performance up

 

 

For the first two months of the year, pork exports to Belorussia are up 49% to 11,400 tonnes and to the Ukraine there are up 76% to 7,600 tonnes. In 2011, Polish exports rose to 540,000 tonnes, 259,000 of which are shipped to Third Countries mainly Belorussia, the Ukraine and Russia. Cuts sales were up 49% and processed pork represent 37% of export value. The opening of the Chinese market to 12 Polish plants offers further potential for growth. However, this growth will be limited by the volume of pork available in 2012. (Source: IFIP)

 

 

Russia

 

ASF

 

At the end of July, an ASF outbreak was confirmed on a large pig fattening enterprise in the central Russian Tver region. This most far-reaching ASF outbreak to date is expected to result in the culling of about 100,000 pigs in the region. The virus had been found in the area before however only on small holdings or in wild boars. (Source: topagrar, various)

 

Grain prices

 

Due to the lasting drought in the Central and Ural region of Russia, grain harvest forecasts have been worsening continuously. The cost of production of pork may go up 25% because of increasing feed cost. Last week Russian grain prices continued to rise. For the last three weeks prices have gone up by USD 6-10/tonne weekly. In the Black Soil region of Russia, the supply of feed grains on the domestic market has been limited due to the growing demand from importers, which is further adding to the difficult situation. (Source: RBK daily)

 

Investment in Tambovskaya oblast

 

Rusagro Group announced the planned construction of another pig-breeding complex in order to increase the capacity of Tambov Bacon to 16,200 tonnes of pork annually. The required investment is RUR1.3 billion (~ USD 40,335,000). After completion, which is schedule for the end of the year the total capacity of Tambov Bacon will be 131,200 tonnes of pork annually.  (Source: PigUA.info)

 

 

Spain

 

Cárnicas Villar's strong growth

 

The pork processor from Soria will produce 7,150 tonnes of cured meats in 2012, 2,913 tonnes of which dry-cured ham. Turnover should exceed €50 million. Exports represented 2.6 million in 2011 (+25.6%). (Source: Alimarket)

 

Grupo Alimentario Lorca invests

 

The abattoir from Murcia is investing €1 million in its abattoir this year. Last year, it processed 28,000 tonnes of pork and 3,000 tonnes of beef for a turnover of €61 million. The company exports €2 million worth of pork products to Third Countries. (Source: Alimarket)

          

Pork prices Barcelona Market Week commencing 30 July 2012
Cut Name	Price range (Euro/Kg)
Gerona Loin Chops	2,65/2,68
Loin Eye Muscle	3,56/3,59
Spare Ribs	2,93/2,96
Fillets	5,43/5,46
Round Cut Legs	2,76/2,79
Cooked Ham	2,26/2,29
Rindless Picnic Shoulder	1,72/1,75
Belly	2,29/2,32
Smoked Belly with Spare Rib Section Cut off	2,72/2,75
Shoulder chap or Head Jowls	1,23/1,26
Back Fat, Rindless	1,18/1,21

              

              

Ukraine

 

Market

 

According to the State Statistics Committee, during the first six months of 2012, the volume of pigs supplied to the processing enterprises was 92,600 in live weight (21.2% less than during the same period in 2011). The average price for pigs in live weight was UAH15,908/tonne (US$1,964/tonne).

 

Pork imports

 

In June 2012, pork imports amounted to 19,974 tonnes, which is an increase by 3.9 times compared to June 2011, and 2.9% less than in May 2012. Pork exports in June amounted to 1,131 tonnes, 32% more than in June 2011. Total exports during January-June 2012 were 10,352 tonnes representing an increase of 63.5% compared with the same period in 2011. (Source: PigUA.info)

 

 

USA

 

High feed prices forces ethanol shut downs

 

According to banking reports, fast rising corn prices have forced the shutdown of a fifth of US ethanol plants and a slow down in a further half of them. Archer Daniels Midland one of the two largest producers of corn-based ethanol with a capacity of 1.7 billion gallons, lost US$61 million on this activity last fiscal year due to high input prices and low output prices. (Source: Beef magazine, Financial Times, Reuters)

  

   

US$1 = EUR0.81 (August 7, 2012)