September 15, 2017

Spain's rise as key pig meat exporter gets stalled

Spain has emerged as a key pig meat exporter since joining the EU, with especially strong growth in shipments between 2014 and 2016, but this has come to an end so far this year, according to AHDB Pork.

It said the fall in Spanish exports so far this year is due to several factors including only a marginal increase in pig meat production, good domestic demand helped by increased tourism, increased pig prices and a downturn in Chinese demand.

Exports of fresh and frozen pork by volume were down 2% in the first half after an increase of 27% in the equivalent period last year and 18% in 2016 as a whole. At the same time, the average export price was up by 20% on the year from January to June in euro terms, partly due to increased pig prices in Spain and the EU as a whole.

"As with most other EU exporters, it was the downturn in the Chinese market that was the main factor behind the fall in volumes, with trade down by 25% on the year during the first half of 2017", the pork division of the UK Agriculture & Horticulture Development Board said.

Furthermore, it added, there was a small fall, of 3%, in exports to France, which is now once again Spain's main market for pork. In contrast, there was further marked growth, of 16%, in shipments to the UK despite the weaker sterling. Chilled cuts, led by boneless, account for two thirds of trade with the UK.

The increase in Spanish pig slaughterings and production was less than 1% year-on-year in the first half, as the supply of pigs has become more stable. Spain has also reduced its exports of slaughter pigs to Portugal, which would also suggest supply is more balanced with demand.

AHDB Pork saw the short-term outlook for the Spanish market as difficult, saying Spain suffered from an exceptionally hot summer, slowing down the finishing of pigs and lowering carcase weights.

It said that increased supplies of pigs are forthcoming, given cooler weather at a time when demand is starting to suffer from the end of the main tourist season. "Assuming the Chinese market remains more difficult, this is likely to put pressure on Spanish exporters to supply more to the EU market, including possibly the UK", it said.

While the Spanish census for May has yet to be published, AHDB Pork says it is probable that pig numbers are now increasing given the good profitably since the middle of last year.