September 4, 2020

Pork export prices volatile

The global prices of fresh and frozen pork have been volatile since Autumn 2019. Based on figures from the four leading global exporters-the EU, US, Brazil and Canada-average price peaked at over US$3 per kilogramme at the end of 2019, but was back to $2.68/kg by May this year, according to the UK's Agriculture & Horticulture Development Board (AHDB).

The AHDB said that despite the recent peak, prices have remained below the record levels in 2014, when the average price exceeded $3.50/kg. At the time, the US and Asia were hit by PEDv (porcine epidemic diarrhea virus) outbreaks.

The extent of price volatility has been mixed among the individual exporters. Prices for US, EU and Canadian exports were relatively similar up to mid-2019, but have since diverged. EU exports, for example, are priced significantly higher than those from elsewhere.

At the end of 2019, EU prices averaged $3.52/kg, but decreased 18% by May. US prices have been more stable, although at a consistently lower level. Canadian pork has been similar to US pork, but it experienced a stronger peak of US$2.91/kg in January.

Brazilian prices, meanwhile, have remained the lowest of the key exporters, and recently experienced a sharp fall (-9% from the end of 2019).

The differing levels of price volatility reflect the differing markets' fortunes regarding opportunities to export to China and reaction to the coronavirus pandemic, said AHDB senior analyst for red meat Bethan Wilkins. While EU exporters were well-placed to capitalise on strong Chinese demand at the end of last year, US pork faced additional tariffs and Canadian pork was banned in the second half of last year. Demand for Brazilian pork also increased.

This year, AHDB noted that the value of EU pork has been knocked by falling domestic demand due to the coronavirus pandemic. The situation in the US and Canada is less clear-cut, at least at wholesale level, it added.