Denmark's pig sector to see positive developments into 2014

August 13, 2013

BPEX Export Bulletin– 9 August 2013 (Week 32)

This week's export news

We are pleased to report good progress with the autumn programme. We are fully booked for the Restaurant & Bar show in Hong Kong and the mission to West Africa, both in September. Exporters can still attend IFEA in Johannesburg (18-20 September). Time is running out for the English Meat Dinner on 7 October and exporters are reminded to contact Claudine Collin at claudine.collin@ahdb.org.uk or Susana Morris at susana.morris@ahdb.org.uk with their requirements. We are also attending Fine Food Australia during the first week of September, and are now participating in the GREAT (branded) British Food Week in Japan in October with a "GREAT British sausage week".

France

Pork and charcuterie household purchases

In the period from 1 January to 14 July 2013, volume purchases of fresh pork decreased by 1.7% compared with the same period last year. During the same period, retail prices increased by 6.1%. The same statistics over a rolling year show a decrease in volume of 2.9% with a price increase of 6.2%. For charcuterie products, excluding fresh sausages, volumes increased by 1.4% since 1 January with a retail price increase of 2.1%. Over the rolling year, volumes of charcuterie purchased increased by 1.9% with a retail price increase of 2.2%.

First orders for "La Lauragaise"

The new company set up by Laurent Spanghero, specialising in cassoulet production, sausages, etc. has received the support of three major French retailers. 70 Intermarché, 40 Carrefour and 30 Leclerc supermarkets have placed orders with the company. 15 to 18 extra employees could be recruited in response to the demand.

Markets

Pigs

The basic 56 TMP price is predicted to remain relatively stable or increase slightly next Thursday in Plérin. Supplies are limited, which is good for prices. However, abattoirs are prudent due to the slow holiday market for meat which is also a short week due to the bank holiday.

Cuts

Prices for cuts were higher in Rungis in July, by between 1.3 and +7.4% compared with prices in June. Despite the overall increase, loins, excluding chump, were 0.4% cheaper while the "extra" loin fell by 0.3%. In this context, IMR (Rungis Market Index) is 3% higher. Prices for July 2013 are higher by 5% to 17.9% compared with July 2012.

Pork prices Rungis - Week commencing 5 August 2013
Cut name	Price range (Euro/Kg)
Back fat, rind-on	0.65
Trimmings	1.52
Leg	2.68
Loin including chump	3.11
Loin excluding chump	2.82
Belly extra without trimmings	2.95

Denmark

Rabobank positive forecast

Rabobank predicts positive developments for the pig sector during the second half of 2013 and into 2014. The forecast does, however, show limited supply growth with a likely increase in demand from China. However, only moderate price increases are forecast as a result of high global stocks and the continuing economic crisis. According to Rabobank analyst Albert Vernooij, the improved margins from moderate price rises and lower feed costs may not be sufficient to fully cover losses from the early part of 2013. (Source: Landbrugsavisen).

Markets

Slaughter pig supplies remain tight on the Danish market. On the European market, fresh legs are traded at similar prices. Other cuts are also traded on a stable market. However, demand has increased for shoulders and collars. The UK bacon market is relatively stable. However, following recent price increases, volumes sold are reported to have fallen. On third country markets, demand from Asia remains stable while a positive trend in shipments to Russia is reported.

Danish Slaughterhouses - payments week commencing 5 August 2013
Slaughterhouse	Danish Crown	Tican
Slaughter pigs (70.0 – 86.9 kg)	Euro 1.561	Euro 1.561
Difference to last week	unchanged	unchanged
Sows (Above 129.9 kg)	Euro 1.132	Euro 1.132
Difference to last week	0.027	0.027
Boars (Above 109.9 kg)	Euro 1.000	Euro 1.000
Difference to last week	0.027	0.027

Germany

Pork prices Hamburg Market Week commencing 5 August 2013
Cut name	Price range (Euro/Kg)
Round cut leg	2.45/2.60
Leg (boneless, rindless max fat level 3mm	3.30/3.60
Boneless Shoulder	2.70/2.85
Picnic Shoulder	2.10/2.30
Collar	2.80/3.10
Belly (bone in, ex-breast)	2.40/2.65
Sheet Boned Belly (rindless)	2.35/2.55
Jowl	1.60/1.80
Half Pig Carcasses U class.	2.14/2.22

Russia

Pig population dynamic positive

As at 1 July 2013, the Russian pig population totalled 20.5 million head with 72% of them from commercial operations. The general trend compared with a year ago was positive. However, in the four regions of Russia that reported ASF outbreaks numbers decreased. As a result, in the Southern Federal Region the number of pigs decreased by 28% on-year to 12 million head. In the Central Federal Region, accounting for 41% of total population, numbers increased by 22% to 8.4 million pigs. The main driver behind this increase was the launch of several new pig-breeding complexes in the region. (Source: meatinfo.ru)

New unit

The construction of a pig-breeding complex for 65,000 pigs has commenced in Cheliabinskaya oblast in the Southern Ural Region. The unit will start production in October 2014. The meat-processing corporation, Remkor, has invested RUB70 million (over US$8.6 million) in the project. (Source: Pigua.info)

China

Production rise in line with consensus

According to official statistics, pork production was 26.14 million tonnes in the first half of 2013, growth of 1% on-year. China's hog slaughter and hog inventory at the end of June were 342.1 million head and 452.5 million head respectively. (Source: CN Agri)

Half year pork imports

China's pork imports totalled 272,300 tonnes in the first half of 2013, a slight drop of 0.14% compared with year earlier levels. Germany surpassed the USA as the largest pork supplier to the Chinese market in the first half of this year with a holding 23% market share. The US share of the market shrank from 36% in the first half of 2012 to only 18% in the six-month period this year as a result of China's requirement for US pork suppliers to submit a ractopamine residue report from this year on. The UK's market share during the period was 4%, with shipments totalling nearly 10,000 tonnes. (Source: BOAC)

Chinese wholesale prices week commencing 5 August 2013
	Price (RMB/Kg)	£/Kg	change on week
Pig Carcase	21.27	2.23	1.19%
Source: BOACL
Prices collected from wholesale markets in 36 medium and large Chinese cities

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