December 12, 2012
                                                                                         

BPEX Export Bulletin-December 2012 (Week 49)

 

 

This week's export news

 

Third Country Export Health Certification: we are waiting for the green light from Defra and the FSA for the all-important exports to Australia. All remaining issues have been resolved on the Australian side. We are also progressing the listing of new plants and cold stores for export to China although, in this case, progress will be slower. In the short term, we aim to resolve the issue around the exports of pig trotters, which may represent up to 40% of future exports to China. Exporters interested in the Malaysian market should contact the export office.

 

BPEX and EBLEX took part in a mission to the major FIHAV exhibition in Havana. This was our first foray into Cuba for more than 10 years. We exported pork to Cuba in the 1990's. Cuba imported 8,000 tonnes of pork in 2011, mainly from Canada and Spain as well as 2,000 tonnes of lard. Our conclusions are that Cuban prices, administrative difficulties and payment terms do not lend themselves to UK meat exports, together with financial and time investment needed to open the market. A report on the visit is available from the export office. Regarding the Dominican Republic, the veterinary inspection has been postponed to the end of January.  The Chinese veterinary inspection on pig semen due to take place this week has also been postponed until 12 to 18 January.

 

The schedule of activity for January to June 2013 has been released and exporters will receive a copy by post. Highlights include our first participation to SIAL China (7-9 May - Shanghai) as well as a strong presence at Hofex (11-14 May – Hong Kong) and CAHE (18-20 - Wuhan). These three events respond to different needs. SIAL is the largest trading show in China. Hofex is more focused on premium products whilst CAHE is the main livestock genetics show in China.

 

 

Denmark

 

Market

 

Prices have come under pressure due to the downturn in Germany. However, due to strong demand on several markets, Danish slaughterhouses have, by and large, maintained prices for fresh cuts. On the European market, fresh leg prices have slightly eased while other cuts remain virtually unchanged. The situation on the UK bacon market remains stable. (Sources: Danish Crown, Tican, Danish Food Council)

 

Danish Slaughterhouses - payments week commencing 3 December 2012
Slaughterhouse	Danish Crown	Tican
Slaughter pigs (70.0 - 86.9 kg)	Euro 1.627	Euro 1.627
Difference to last week	Unchanged	Unchanged
Sows (Above 129.9 kg)	Euro 1.132	Euro 1.132
Difference to last week	Unchanged	Unchanged
Boars (Above 109.9 kg)	Euro 0.962	Euro 0.962
Difference to last week	-0.053	-0.053

Lower pig numbers

 

Statistics Denmark has published the results of October 1, 2012 pig survey. The total pig population declined by 1.6% on-year. The decrease is primarily due to the stock of finishers, which was 5.4% lower on-year. When disregarding finishers over 50kg, total numbers were stable, falling by just 0.2%. For breeding herds, the number of pregnant sows was 3.2% lower than a year ago. This decrease will almost entirely be compensated by continual higher productivity. (Source: Danmarks Statistik)

 

Tulip Food Company under pressure

 

Partly due to rising prices, Tulip Food Company's turnover increased to €666 million. In contrast, their surplus decreased to €20 million compared with €35 million a year ago. The company welcomes the fact that Tulip's value on the international market increased. On markets outside the Nordic region, the company's earnings have set a record for the third time in a row and the value of the global Tulip brand increased significantly. (Source: Landbrugsavisen)

 

DAT-Schaub progressing

 

The Danish Crown subsidiary, DAT-Schaub, has shown significant progress, driven by strong sales of lamb intestines on world markets and pig bellies to China. The business result finished at €44 million with a net result of €28 million, an increase of 18% compared with the previous year. During the latest year, DAT-Schaub strengthened its position in the global food industry. In November 2011, the group became co-owner of Trunet Packaging Services in the UK, supplying the UK and Ireland with products for the charcuterie industry. DAT-Schaub is the driving force behind DCW Casing LLC's attempt to establish the largest business in North America for natural intestines. (Source: Danish Crown)

 

DTL in Padborg strengthens breeding stock sales

 

DTL's market position in Germany will improve, states DTL. A new collaboration with German Hülzenberger Zuchtschweine will help increase sales of Danish breeding pigs in Germany, says DTL. As part of the cooperation, Hülzenberger Zuchtschweine will cease production of breeding animals and from now on, will use only Danish breeding animals. The German pig company is part of the agribusiness company, Schaumann. (Source: Landbrugsavisen)

 

 

France

 

Export certification to Korea

 

In order to include latest OIE recommendations in terms of veterinary and sanitary rules relating to the international trade of meat, the Agriculture Ministry of Korea has established new conditions for importing pig meat. Korean authorities passed these new requirements to DGAL (French Ministry of Agriculture) in order to establish new export certification. DGAL is presently consulting SNIV–SNCP (Meat and pig meat industry federation) before finalising the new certificate, which will be used from 21 January 2013.

 

Exports to Taiwan?

 

Today, Taiwan imports 90,000 tonnes of pig meat from USA, Canada, Denmark, the Netherlands, Hungary and from a limited number of Spanish plants. An inspection visit by the Taïwanese sanitary authorities is planned for March 2013; the visit in France will be targeted on a selection of plants established through SNIV-SNCP in coordination with DGAL and SNIV-SNCP. This visit will also include: Austria, Spain and Sweden.

 

Partnership

 

The 20-year-old solid partnership signed between Cooperl (now Cooperl Arc Atlantique) and Gatine Viande has been renewed for five years. The cooperative holding 34% of Gatine Viande has 300 members involved in the programme, designed to supply Intermarché with 22,000 pigs per week. This contract is not only a commercial deal but a philosophical engagement from all partners to support the "Made in France" signature. In 2010, €18 million was invested in the processing plant to reduce harsh working conditions, sometimes to the detriment of profitability.

 

Indebted pig farmers

 

Pig farmers carry the heaviest debt of any faming occupation in France at an average of €330,000 per holding, according to a statistical agency. The debt is split between long and medium-term loans, (in the region of €210,000) and short-term loans (around €120,000). (Source: Agra Europe)

 

Markets

 

Pigs

 

Piglets

 

Cuts

 

Pork prices Rungis - Week commencing 3 December 2012
Cut name	Price range (Euro/Kg)
Back fat, rind-on	0.85
Trimmings	1.68
Leg	2.48
Loin including chump	3.02
Loin excluding chump	2.69
Belly extra without trimmings	2.84

 

Germany

 

Pork prices Hamburg Market Week commencing 3 December 2012
Cut name	Price range (Euro/Kg)
Round cut leg	2.30/2.40
Leg (boneless, rindless max fat level 3mm	3.10/3.45
Boneless Shoulder	2.75/2.90
Picnic Shoulder	2.25/2.40
Collar	2.40/2.60
Belly (bone in, ex-breast)	2.60/2.80
Sheet Boned Belly (rindless)	2.45/2.75
Jowl	1.60/1.75
Half Pig Carcasses U class.	2.10/2.20

  

Belgium

 

Pressure on producers

 

Difficulties in selling key cuts such as carré and legs and poor short-term export prospects are weighing on the market. Producers faced with high feed costs are responding by selling pigs at lighter weights. (Source: Mercolleida)

 

 

Spain

 

Falling market

 

Low internal demand and "disappointing" exports are applying pressure to pig prices which are easing. (Source: Mercolleida)

 

Pork prices Barcelona Market Week commencing 3 December 2012
Cut Name	Price range (Euro/Kg)
Gerona Loin Chops	2.60/2.63
Loin Eye Muscle	3.53/3.56
Spare Ribs	2.98/3.01
Fillets	5.43/5.46
Round Cut Legs	2.73/2.76
Cooked Ham	2.57/2.60
Rindless Picnic Shoulder	1.82/1.85
Belly	2.54/2.57
Smoked Belly with Spare Rib Section Cut off	2.97/3.00
Shoulder chap or Head Jowls	1.28/1.31
Back Fat, Rindless	1.03/1.06

 
Greece

 

Processing sector "suffocating"

 

Lack of liquidity and long payment terms from retailers are "suffocating" the pork processing sector. Sopexa believes that Greeks will keep eating meat due to their strong local culture. At the moment, 60% of the pork is imported. Imports are only down 4.5% to 182,000 tonnes, according to local statistics. Main exporters to Greece include the Netherlands, France, Germany and Belgium. Pork remains by far the main meat consumed with a 39% share of the market. (Source: ΤΡΟΦΙΜΑ ΚΑΙ ΠΟΤΑ - Food & Drinks)

 

 

Latvia

 

CSF outbreak

 

The country has reported an outbreak of Classical Swine Fever near the Belarus border. The outbreak comes at a bad time when many pig farmers have left the industry. Russia used to be a vital outlet for Latvian pigs but imports were banned last March. (Source: Agra Europe)

 

 

Poland

 

Animex closure weighs on the European market

 

The Polish plant, closed for refurbishment for one week, is leaving a large number of live German pigs with no outlet. Although the situation is temporary, it has affected EU pork prices. (Source: Mercolleida)

 

 

Russia

 

Ractopamine found in US pork

 

During testing, Rosselkhoznadzor experts detected residual content of ractopamine in a consignment of pork and beef imported from the USA to Russia.  Ractopamine is forbidden in the Russian Federation. Rosselkhoznadzor has previously informed FSIS (USA) of similar ractopamine violations. According to Federal Law on the Quality and Safety of Food Products, the consignment must be destroyed or re-exported. (Source: Emeat.ru)

 

Pork import ban from Latvia

 

Rosselkhoznadzor introduced a temporary ban on pork and pork-derived products from Latvia due to registered ASF outbreak in Latvia. The ban covers the import of live pigs, pork and pork products that have not been heat treated. (Source: RBK)

 

 

USA

 

Losses worsen

 

Losses, which were reduced at the end of October to US$2 per pig (farrow to finish), have worsened to US41.55 by week ending 23 November. Pig producers have now been in the red for more than 12 months. Pigs are plentiful, prices low and cold stores are full. (Source: Pork Network, various)

 

 

China

 

Production up

 

According to Genesus China, the Chinese pig herd is 1.5% larger with the number of sows increasing 4.7% to 50.79 million. However, earnings are falling. Although, nationally they are around £7.40 per head, some regions already report negative figures. (Source: Genesus)

 

Smithfield Foods purchases back COFCO shares

 

Smithfield has bought back the 7 million shares held by COFCO, the largest food trader in China since 2008. Both companies will continue their strong collaboration. (Source: Smithfield Foods)

 

US$1 = EUR0.77 (Dec. 12, 2012)