August 25, 2023

 

EU pork exports hit lowest volume since 2015 amid production decline

In the opening half of this year (January – June 2023), pork exports from the European Union (EU) have dwindled to an extent not seen since 2015 at just under 2.02 metric tonnes (MT) of pork, the lowest volume recorded since 2015, when shipped pork totalled less than 2 MT, UK Agriculture and Horticulture Development Board reported.

 

A year-on-year comparison revealed a 17% decline in total pork exports across the region. The fresh/frozen category saw a 23% plunge to 1.11 MT. This marks the smallest volume for fresh/frozen pork shipments since 2015, when the figures slipped below 1 MT. All pork product categories have experienced diminishing volumes: offal and processed pork exports are down by 10%, while bacon and sausages recorded declines of 4% and 3% respectively.

 

The driving force behind this volume decline is the reduction in supplies, stemming from diminished pork production within the continent. For the initial five months of this year (January – May), the EU has generated 8.68 MT of pork, reflecting a 9% decrease compared to the same span in 2022. Notably, this is the first instance since 2014 where the production volume for this period has slipped below 9 MT.

 

The production declines are widespread across all EU nations, with key pork-producing countries such as Germany, Denmark, and Spain witnessing the most notable changes in volume.

 

This dwindling production has induced an uptick in swine prices, which coupled with inflation's surge, has propelled the export values higher. The collective value of EU pork exports for the year-to-date (January – June) stands at EUR 6.16 billion (~US$6.6 billion; EUR 1 = US$1.08). Although a marginal year-on-year decrease of 4%, this decline is primarily due to lower volumes.

 

However, the average unit price (value divided by volume) has surged by 16% to EUR 3,051/t (~US$3,290). Bacon has spearheaded this growth, surging nearly EUR 750 (~US$808), closely trailed by sausages with a rise of EUR 660 (~US$711). Offal exhibited the smallest growth, ascending by EUR 230 (~US$248), while processed and fresh/frozen pork categories advanced by EUR 520 (~US$560) and EUR 400 (~US$431) respectively.

 

While the volume crunch persists and prices ascend, the top five destinations for EU pork have maintained their positions.

 

China remains the dominant market, commanding 31% of EU export volume—an increase of 3 percentage points from the previous year. The UK's market share has also surged, growing by 6 percentage points to occupy a 20% stake. Conversely, the Philippines and South Korea's market shares have slipped by 3 and 1 percentage points to reach a 6% share each. In parallel, Japan has sustained its year-on-year status, retaining a 9% market share.

 

As the year progresses, the European Commission anticipates a 5.5% contraction in EU pork production compared to 2022. This suggests minimal deviation from the current market landscape, with exports projected to finish the year 12% below last year's volumes. However, uncertainties loom over swine prices. Input costs have eased from the historic highs of 2022, and while product scarcity has driven prices upward, weakening demand poses a challenge. Elevated prices have rendered EU products less competitive on the global market, prompting consumers at home and abroad to explore more economical alternatives.

 

-      UK Agriculture and Horticulture Development Board