Wednesday, 5 August 2020
EU pig prices have weakened since the last update, although more recently have begun to show some stability. Over the past few weeks, UK prices have shown a degree of support and have been relatively independent of those in the EU, although is that about to change?
Over the long term, UK spot prices (as measured by the tlspot.co.uk series) have a loose but positive relationship with prices in the EU. This relationship has been particularly weak recently, possibly because UK imports of EU pork have been cut in response to the closure of our UK foodservice sector.
As lockdowns ease across the UK, and trade recovers, the relationship between the EU and UK price markers might be expected to strengthen again. The UK spot prices have certainly been falling in recent weeks, and reports suggest that processor contributions may also be coming under some pressure. Add to this sterling’s recent strength (which makes EU pigs cheaper in GBP terms), and there appears to be downward pressure on the SPP for the weeks ahead.