Chinese pork demand soothes UK pig price woes

Chinese import demand for UK pork is expected to grow further in the second half of the year
Chinese import demand for UK pork is expected to grow further in the second half of the year

An increase in Chinese demand for pork is expected to soothe concerns over low pig prices in the UK.

There are 'encouraging signs ahead' for UK pig producers despite the sector experiencing 'disappointing' prices last month, the National Pig Association (NSA) says.

The SPP stood at just below 153p/kg in the week ended August 24, down slightly on the previous week, meaning prices have remained stagnant in the past few weeks.

The price index was just 0.16p\kg higher than at the end of July. Prices are currently falling at a slower rate than this time last year, with the late-August price more than 4p up on a year ago.

However, the concern for producers, as it has been since spring, is that that UK prices continue to lag behind prices in the EU.

The UK price, which normally carries a healthy premium over EU product, remains well below prices in all the major EU pig producing countries, including a German price of 174.18p, up from 160p/kg at the end of July.

AHDB’s EU reference price also currently shows Spain (163.44p/kg), Poland (162.55p/kg), Denmark (157.39p/kg), the Netherlands (156.62p/kg), and France (153.99p/kg) ahead of the UK price.

In each country, prices rose during August, including by nearly 15p in the Netherlands.

Pig producers continue to express frustration at the situation as to why UK prices remain relatively stagnant.

Despite this, UK pork exports to China were up 77% in the first six months of the year, totalling 32,692 tonnes, compared with 18,429 in the first half of 2018.

Chinese import demand is expected to grow even further in the second half of the year as the full impact of African swine fever-related herd losses and record domestic prices feeds through.

According to the NPA, the UK should soon be better-placed to meet this demand.

Zoe Davies, chief executive, said: “Chinese exports will increase still further as more UK plants become fully approved, including for the lucrative trotter market, hopefully by the end of September.

“Marketing groups have consistently said that the real increase will be seen at the end of Q3 so the picture will be much more positive towards the end of the year at a time when prices would traditionally drop.”

She added: “The suggestion was that without China, we would not have seen any of the price increase that we have seen this year.

“This fact, combined with the excellent harvest and reductions already being seen in feed prices will mean that the situation for many should ease considerably.”