December 16, 2003
Slump in EU Pig Prices
In just four months, EU pig prices have slumped by nearly 30p/kg, amid oversupply and weak demand.
Returns in the five major EU pigmeat production countries have dropped to an average of 72p/kg compared with 100p/kg in September.
In addition, the rising feed values are contributing to farmers' worries, adding 20p/kg deadweight to production costs in the UK and 23-30p/kg in Spain, Italy, the Netherlands, France and Ireland.
According to the British Pig Executive (BPEX) there will be "another exodus from the pig industry" if pigmeat prices do not rise to offset major feed cost increases.
The National Pig Association and continental pig organisations have written to Franz Fischler calling for appropriate measures to be introduced to stabilise the EU pigmeat market.
Cutting cereal import tariffs might help to reduce grain prices in Europe but would not necessarily solve the overall problem, which is due to tight world grain supplies.
Stricter pig import controls and production quotas are also being discussed, together with the possible introduction of private storage aid to ease pressure on an oversupplied market.
This would allow pigmeat to be released when better demand filters through following the reopening of the Japanese markets to British pork.
BPEX chairman Stuart Houston welcomed the reopening of this market and said other opportunities in Southeast Asia would also have to be exploited.
But Russian plans to reduce meat imports to 450,000t next year and to increase their domestic production by 15-20% have come as a blow to EU exporters.
Exports to Russia are also subject to import tariffs of 15%, adding further to exporters' costs.