The Courier & Advertiser (Fife Edition)
UK pig meat sector resists global rise
UK pig prices remain stubbornly in the doldrums and 13%-17% lower than 12 months ago despite global prices performing well in the first quarter of 2021.
Average prices in the EU have risen by more than 12% since the beginning of February, while in the USA and Canada, farm gate prices climbed 35% over the same period largely as a result of heavy demand from China.
Meanwhile, according to the latest QMS data, there has been only a modest 2% recovery in the UK since February – and this at a time when pig producers are having to cope with rising feed prices. The continuing issues in the industry led to the Scottish Government introducing a £715,000 hardship fund for producers last month.
QMS economist Stuart Ashworth said: “With cereals and oilseed meal prices some 15-20% higher than 12 months ago, the fact that farm gate prices are lower than this time last year clearly indicates lower margins for pig meat producers in Scotland.”
Mr Ashworth added that while it had been widely thought that China had African Swine Fever under control, recent reports indicate the disease is still circulating and even increasing in some areas, which is likely to mean China will continue to be a major player in the international pig meat market throughout 2021.
But while the UK benefited from increased trade with China in 2020 it was less successful during January 2021.
“The reasons for this decline in UK trade with China are complex but include China’s removal of export approval from some processing sites, including a major site in Scotland, because of concerns over Covid-19 at these premises,” added Mr Ashworth.
“Not only does this reduce many market opportunities globally for these sites they have also led to limited slaughter capacity resulting in pigs being held back which leads to them falling out of premium specifications and liable to price penalties.”
Mr Ashworth suggests that tensions over China’s treatment of the Uighur communities is an added hindrance to recovering export approval.