March 7, 2018

Global pork prices stabilise as of end-2017

Global pork prices stabilised in the lastquarter of 2017, averaging US$2.64 per kilogramme, virtually on par with year-earlier levels, according to AHDB Pork.

AHDB Pork also saidsupply and demand for pig meat were more balanced at the end of 2017 in contrast to previous months.

Global export volumes, which had been trailing behind year-earlier levels as Chinese demand fell back, grew 2% year-on-year in the fourth quarter. This brought global pork exports to 1.43 million tonnes during the quarter, a record high for the period.

The pork division of the UK Agriculture & Horticulture Development Board said a 12% (+27,000 tonnes) year-on-year increase in shipments to Japan during the last quarter was key to driving the overall increase in trade. "This reflects declining production in the country, coupled with some increase in demand and high domestic prices which make imported product more competitive," it said.

Japanese consumption and production, though, are expected to remain flat this year, so further import growth might not be expected on this market, AHDB Pork added.

AHDB Pork forecasts a further downward pressure on global pork prices this year as increased production from the four largest global pork exporters-EU, US, Canada and Brazil-is anticipated this year. "Unless demand can pick up, the global markets risk being oversupplied, resulting in downward price pressure".

China is expected to absorb additional global supplies as there are some expectations Chinese demand for imported pork could pick up again this year. Competition will therefore be likely intense.