August 14, 2012

 

BPEX Export Bulletin - August 2012 (Week 32)

 

  

Pork export news this week

 

Export certificate 7319 EHC to South Africa has been further amended along the lines requested by exporters; the revised certificate now allows the export of bacon (same cold treatment conditions as below apply). The South African authorities have dropped the requirement for the freezing to be done within a certain timeframe and have now allowed the option of the journey time to be included as part of the cold treatment period provided the container is equipped with a working thermograph.

 

 

China

 

Astonishing regional variations

 

The valuable Beijing Shennong Kexin China's Hog Industry Atlas has been revised for its second edition and makes fascinating reading. It shows that Chinese pig inventory has been somehow stable since 2008 at 460 million heads with a sow inventory also stable since 2004 at 49 million heads. The regional inventory remains the same as for the 2010 edition with the highest concentration in Henan, Hunan, Sichuan, Shandong and Hubei, these five central provinces accounting for 38% of sow inventory. The provinces of Shanghai (35% of total number of pig farms), Hainan (17%), Beijing, Jiangxi and Guangdong (all 16%) count the most large-scale pig farms and the South and Henan the least. Pigs are mostly kept outdoors in the Western Provinces which have a lower population density (91% of pig farms in Tibet, 75% in Yunnan, 84% in Guizhou, 70% in Qinghai). Profitability peaked in 2011 but has declined since. According to Chinese statistics, pig farming is more than times more profitable in Inner Mongolia, Sichuan or Guizhou as in the backward Northern provinces of Shanxi and Gansu. Inner Mongolia seems to have the most modern and productive farms due to the policy of relocating pigs in the North.

 

Following small imports of breeding pigs for the period 2000-207 at around 2,500 heads per year, imports jumped in 2008 to 11,600 heads and fell back to respectively to 2,000 and 2,600 heads in 2009 and 2010. Exports rebounded in 2011 to 7,600 heads. The UK, Canada and the USA are the main exporting countries ahead of France and Denmark. Breeding pigs were mostly imported to the Southern Province of Guangdong (33%), followed by Hubei in Central China (20%), Shanghai (12%), and for the North, Shandong (8%), Hebei (7%) and Tianjin (7%). It is notable that all breeding pigs with the exception of Shanghai are imported in the central belt from Beijing in the North to Hong Kong in the South and that no import has taken place in Manchuria, Western or Eastern China. Nucleus farms are spread all other China with the exception of the West and Inner Mongolia and the centre-north. This spread mirrors the density of large-scale pig farms and processing plants.

 

The live pig flow from the periphery to the Central China, particularly from Inner Mongolia is well documented but less so from Guangdong to the neighbouring provinces. This involves no less than 40 million live pigs per year. Henan in central China imports 24 million pigs.

 

Pork demand is strongest in the centre and south of the country and peaks in Guangdong Province and Sichuan, an area well known for its strong pork culture.

 

 

Denmark

 

Market

 

On the European market lower supply results in fresh legs being sold at increasing prices. Front parts and loins are sold at increasing prices as well while other cuts are sold at mostly unchanged prices. The situation on the British bacon market remains stable. As to markets outside of Europe there is still a fine activity to Russia, Japan and China. (Sources: Danish Crown, Tican, Danish Food Council).

 

Danish Slaughterhouses - payments week commencing 6 August 2012
Slaughterhouse	Danish Crown	Tican
Slaughter pigs (70.0 – 86.9 kg)	Euro 1.533	Euro 1.533
Difference to last week	Unchanged	Unchanged
Sows (Above 129.9 kg)	Euro 1.064	Euro 1.064
Difference to last week	0.027	0.027
Sows (Above 129.9 kg)	Euro 0.894	Euro 0.894
Difference to last week	0.027	0.027

 

 

France

 

Differed Delivery Marketing

 

Kermené in Brittany is the integrated supplier of the Leclerc supermarket chain, it is also the pig meat plant which decided to pioneer MLD (Marché à livraison différée or Differed Delivery Marketing) the new marketing process designed to rationalise the marketing of pigs in the Leclerc supply chain. The reasons for this marketing mechanism is the on-going issue for producers to deal with fluctuating production costs (feed) and selling price to secure a margin which, for an average pig farm of 250 sows, varies between + €250 000.00 and - €240 000.00…The objective for the producer is to secure the benefit of improved efficiency (feeding costs) by contractualising the purchase price of feed and the selling price of pigs. Although the results are encouraging for Kermené and the 40 producers of the group of producers Syproporcs involved in MLD and supplying Kermené, the situation is more difficult with other operators of Marché du Porc Breton who are used to speculation. On average 40% of the production of these 40 breeders has been marketed through MLD, representing 17,290 pigs in 2011 and 10,855 so far in 2012 (up to end of June). This mechanism is well in place in USA but it will take some time to convince French Bretons.

    

Pigs

 

Between the German stability and the Spanish firmness, France opted for the compromise by raising its 56 TMP price by 0.5 cent. A strong mobilisation was however necessary to obtain this.

    

Piglets

 

Offers are low but are enough to meet the needs of the moment. The seasonal slow-down of prices continues, although it is more limited than usual due to a moderate offer. Animal feedstuffs are more and more expensive and worry the sector. Also please note that the FNB-FNCBV prices remained stable last week. Nothing moves for the 25 kg and –4 cents for post weanlings.

    

Cuts

 

The market is regular in holiday areas, and very calm in other areas. The operators pursue their efforts for higher prices, with more or less success depending of cuts. This trend should go on in the short term.

  

Pork prices RUNGIS week commencing 6 August 2012
Cut name	Price range (Euro/Kg)
Back fat, rind-on	0,65
Trimmings	1,55
Leg	2,51
Loin including chump	2,95
Loin excluding chump	2,73
Belly extra without trimmings	2,70

 

 

Germany

 

Market

 

On the Hamburg market, prices remain unchanged. The rise in the German quote at the end of July has largely been adapted but marketers are now trying to fully pass it on to their customers. However, the market is still defined by no surplus in supply. Demand is still fine with focus on collars and loins but also shoulders and bellies. A wait-and-see attitude can now be observed with regards to the development of the quote. The trade with sow meat is satisfying despite increased prices which is helped by a notably increased quote for slaughter pigs as well as fine demand being met by just about the right supply. (Source: AMI)

 

ASF concerns

                                

Following the first confirmed outbreak of ASF in Ukraine the Federal Ministry of Food, Agriculture and Consumer Protection has alerted travellers not to bring any pig meat products originating from Russia or Ukraine into the country. Although imports of live pigs and pig meat products from these countries is prohibited concerns are now rising that products brought into the country by travellers could in the form of food waste get to pigs or wild boars which might potentially lead to the introduction of the virus in the country. (Source: ISN)

 

Protest

 

Dutch investor Adrian Straathof is planning to increase the capacity of a pig fattening sites in the Eastern German town of Brenkenhof by 13.300 pigs. Currently, the site that was constructed in 2006 has a capacity of 19.000 sows and pigs for fattening. However, approval for the planned construction is pending as residents are heavily protesting. Now the regional Department for Agriculture and Environment will have to examine the objections. (Source: topagrar)

 

Pork prices Hamburg Market Week commencing 6 August 2012
Cut name	Price range (Euro/Kg)
Round cut leg	2,20/2,40
Leg (boneless, rindless max fat level 3mm	3,00/3,25
Boneless Shoulder	2,50/2,65
Picnic Shoulder	2,08/2,25
Collar	2,75/2,90
Belly (bone in, ex-breast)	2,30/2,45
Sheet Boned Belly (rindless)	2,18/2,40
Jowl	1,45/1,55
Half Pig Carcasses U class.	2,12/2,22

 

 

Hungary

 

Gyulai talks continue

 

Talks regarding the future of loss-making Gyulai Húskombinát are on-going said CEO János Ruck. A plan to save Hungary's oldest meat processor and the largest taxpayer in southeast Hungary is before the cabinet, as Gyulai is awaiting formal recognition as a company of national strategic interest. The company employs 400 staff and contributes indirectly to hundreds of suppliers' jobs. (Source: Real Deal)

 

 

Netherlands

 

Prices sharply up

 

Vion has followed the increases in Germany and has brought its quotation to €1.70, the highest since 2008 when they peaked at €1.71/kg. Good summer demand and limited supplies are pulling prices up. The high prices are supported by the high rate of USD against the Euro. (Source: Boerderij Vandaag)

 

 

Spain

 

Pork prices Barcelona Market Week commencing 6 August 2012
Cut Name	Price range (Euro/Kg)
Gerona Loin Chops	2,70/2,73
Loin Eye Muscle	3,66/3,69
Spare Ribs	2,98/3,01
Fillets	5,43/5,46
Round Cut Legs	2,81/2,84
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

  

  

Russia

 

Reduction of import duties

 

As of August 23, 2012, import duties on meat and live animals will be reduced. Specifically, the duty on imports of live pigs, which currently is 40% but not less than €0.50/kg, will be decreased to 5%. Import of pure-bred breeding pigs, as now, will be subject to zero duty. After joining the World Trade Organization, Russia will reduce the duty on imports of pork within the quota volume to zero. It currently is 15% but not less than €0.25/kg. The duty on the import of pork exceeding the quota will be reduced from currently 75% but not be below €1.50/kg to 65%. (Source: APK Inform)

 

Import restrictions

 

Rosselkhoznadzor may restrict the import of meat from some Brazilian, US, Canadian, Mexican and Australian enterprises due to the detection of Ractopaminein pig meat from the companies in question. The Ministry of Health supports the decision of Rosselkhoznadzor. Sergey Dankvert, the Head of the Department, said that letters had been sent requesting an explanation for the presence of Ractopamine in the meat. (Source: Vzgliad)

 

Market

 

Imported Pork Markets (August 7)
Moscow	St.Petersburg
Leg (with bone): USD 4.47 /kg	Leg (with bone): USD 4.32 /kg
Liver: USD 1.60/kg	Loin (with bone): USD 5.27/kg
　	Heart: USD 2.68/kg
(Source: Meatinfo.ru)

 

 

Ukraine

 

ASF outbreak confirmed

 

For the first time, an outbreak of ASF has been confirmed in Ukraine in the village of Komyshuvatka in Zaporizka oblast. The village is located in the steppe zone where there are no wild boars to spread the disease. Veterinary officers are examining pigs in a 150 km radius around the epicentre. So far, 200 pigs have been culled to prevent the spread of the disease. The owners of the slaughtered animals have received compensation from the government.  (Source: PigUA.info)

 

 

US$1 = EUR0.81 (August 14, 2012)