EU pig prices remain in the doldrums

By Duncan Wyatt

Prices in the EU pig market have continued to deteriorate, albeit at a slow pace, in recent weeks. Since the discovery of African Swine Fever in the German wild boar herd in mid-September, the price has fallen back by over €11 in eight weeks to €139.33/100kg in week ended 1 November. The decline has been driven by a further increase in pork supplies available to the EU market, as Germany has been banned from exporting to most third countries, including China. At the same time, usual demand patterns remain disrupted by the coronavirus pandemic, and slaughter capacity remains challenged by social distancing measures.

These disruptions to demand are set to continue as Germany, France and now the UK have all announced month long national lockdowns. The German price, which dominates the European average, fell by around €21 in the eight weeks to 1 November. However, it has barely moved over the past month, falling by less than €1. Other key markets have generally followed a similar pattern. The French had been an exception, showing a period of strength in early October, has since fallen back. Even in Spain where prices have been quite robust, the market gave back some of its recent gains in the past two weeks.

Although UK prices have been falling too, the pricing mechanism has more inertia, and so the premium that has developed over European prices remains marked. It is now €32.98/100kg in the latest week, wider than usual and a far cry from the negative spread seen from mid-2019 into early 2020.

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