EUROPEAN LIVESTOCK AND MEAT TRADING UNION / EUROPÄISCHE VIEH- UND FLEISCHHANDELSUNION

Transcription

1 EUROPEAN LIVESTOCK AND MEAT TRADING UNION / EUROPÄISCHE VIEH- UND FLEISCHHANDELSUNION Brussels, 4 th July O/REF: Circular C-031--EN RE: PIGMEAT Market Situation and Outlook The Forecasting Committee of the Pigmeat Advisory Group met in Brussels on Monday, 25 th June. The meeting showed that the Community pigmeat market would be characterized chiefly by: a growth in production in, esp. under impulse of German, Denmark and Spain, a fall in prices on the record level they had reached in, galloping production costs, and a degradation in the farmer s margin. 1. COMMUNITY MARKET 1.1. Numbers Very partial results of the surveys conducted in April show that the numbers are recovering in Hungary, while they are falling in the Czech Republic and in Poland Production The EU-25 Gross Indigenous Production (GIP), when expressed in head, rose by 1.8% during the first half of. There was a big rise in Germany, Denmark, Poland, and Spain. The rise will continue more moderately during the second half of despite a big fall in Poland. For the year as a whole, the EU-25 would produce million pigs (+1.6%). The EU-25 production, when expressed in tonnes, would amount to approx million or1.7% up (last April the rise was estimated at 0.8%). The fact that carcases are heavier explains why the rise expressed in tonnes is slightly higher than the rise expressed in head. A fall (-1.2%) is expected during the first of 2008.

2 Pigslaughter and forecast by month in 1000 Tonn Seven Member States account for 78.5% of the Community production: Germany Denmark Spain France Italy Netherlands Poland 22.2% 8.4% 15.2% 10.5% 7.3% 5.6% 9.3% All these major producing countries (with the exception of the Netherlands) contribute to the rise in the Community production this year, as shown in the graph below: Development of the pigmeat production compared to 7,5% 6,6% 5,0% 4,6% 5,0% 4,2% 3,4% 2,5% 0,2% 1,7% 2,5% 2,0% 0,9% 1,0% 0,2% 2,3% 1,7% 0,3% 2,7% 1,7% 0,0% -0,4% -0,2% -0,4% -0,7% -2,5% -2,1% -2,3% -2,8% -5,0% Be Bg Cz Dk De Ee El Es Fr Ir It Cy Lv Lt Lu Hu Mt Nl Ös Pl Pt Ro Si Sk Sf Sv Uk Eu 2

3 1.3 Prices Community market prices for E grade Evolution and Forecast (EUR/100kg cw.) 2000 (1) 2001 (1) 2002 (1) 2003 (1) 2004 (2) (2) (2) (3) 2008 (3) 1 st nd quarte rd th Year (1) EU-15 (2) EU-25 (3) EU-27 In the prices rose by 0.5% to EUR per 100kg cw. (annual average price). In view of the cereal availabilities and the animal feed cost, the years 2004 and were satisfactory years for pig farmers. The good profitability of the sector is reflected in the meat/feed ratio which has been above 100 since June It peaked in June and August (121). The year reinforced the farmers situation. The prices during the first half of the year were higher than forecast. The rise continued during the third. This can be explained by the fact that demand both inside and outside was dynamic, boosted by either the crisis confidence turning poultry meat consumption upside down or Russia s blockage of Brazilian meat because of FMD (the embargo on the State of Rio Grande do Sul was lifted the embargo on the State of Santa Catarina is not yet lifted). The prices declined during the last to fall below the level they had reached in and Development of the average Community price for pig carcasses Annual avarage : 2004: 138,4 uro/100kg : 139,1.. : 145,3.. : 134,2,, 150 Prices in uro / 100kg I/ ,47 III/ 142,56 IV/ 132, Week Forecast EU 25 This year the prices are influenced by the rise in production and the slackening in exports (notably to Japan and Russia). Compared with the last three years, they have been falling considerably. The prices during the first of 2008 would be stable. 3

4 National market prices for «E» grade Evolution and Forecast (EUR/100kg cw.) MS 2nd 3rd 4th 1st 2 nd 3rd 4th 1st 2nd 3rd 4th 1st 2008 EU AT B DE DK ES FI FR UK GR IE IT LU PL PT NL SE HU CZ The relation between production and price evolution is clearly shown in the graph below: Slaughter in 1000 T Relation between monthly pig slaughterings and weekly pig carcass prices Euro/ 100kg (expected) Slaughterings EU-25 Price

5 So this year s prices will go down. The fall will be particularly big given the fact that they had reached exceptional level last year. The fall goes along with a rise in the animal feed cost because of competition resulting from the rise in production of biofuels. As a result of this, the farmer s margin is decreasing. Already in November and December last year, the pigmeat/pig feed ratio was close to 100 against 119 in (annual average) and 116 in (annual average). The decrease goes on this year. It will have an impact on farmers activities, esp. small farmers. Prices for slaughtered pigs minus Compound Feed costs (EU - 25) Euro/ 100kg Slaughterings in Mio Tonns ja fe mr ap ma jn jl au se oc no de Margin Compound feed Pigprices Slaught. Eu 15 Slaught EU External Trade Imports (meat and derivatives) In imports declined considerably (-53%) as a result of the EU accession of the ten New Member States (NMS) that used to be the EU s major suppliers. Pigmeat imports amounted to 21,000 tonnes. The major origins were the USA, Croatia, Norway, and Switzerland. Imports into the EU EU-15 72,108 t. 42,911 t. 20,681 t. 27,478 t. EU ,467 t. 2,110 t. 4,683 t. EU ,378 t. 22,791 t. 32,161 t. In imports (all products) were up on to reach 32,000 t. (product weight) of which 14,700 t. of meat, 3,700 t. of prepared/canned meat, and 13,400 t. of derivatives (bacon, fat, offal). A further rise is expected in. As for meat imports, the USA is the major origin. 5

6 Import of selected Pigmeat products Monthly Other Tonns Prep & Sauss Offals Fresh & Frozen Exports 1,828,000 t. (product weight) of pigmeat and derivatives were exported from the EU in As far as quantities are concerned, Russia is still the EU s first trading partner with respect to lowquality pigmeat (trimmings, fats, etc.). It should be pointed out that also in 2004, the Asian markets, esp. the Japanese one, showed dynamism. Japan significantly improved its trade in first-quality cuts with the EU following the USA- Canada crisis on BSE in Exports from the EU EU-15 1,510,000 t. 1,689,000 t. 1,658,660 t. 1,791,866 t. EU ,000 t. 262,942 t. 281,065 t. EU ,828,000 t. 1,921,602 t. 2,072,931 t. 1,678,000 t. Further rise in exports in, probably due to input from the New Member States (NMS) that accounted for 13.7% of the total quantities. The major destinations were Russia (25.1%), Japan (15.9%), the USA (3.8%) and the accession candidate countries. However it should be pointed out that, unlike in the previous year, there was a loss of market shares in Japan. Despite the arrival of Hungary and the rise in sales from the EU to Japan (+1.1%), the EU- 25 exports lost ground to the USA (+12%), Canada (+6%), Mexico (+5%), and Chile (+30%). Exports from Denmark -the EU s biggest exporting country- fell by 13.7%. New record hit in, consolidating the EU s as the world s biggest exporter. The EU s sales of carcases and cuts to Russia were particularly high. They more than compensated for the fall in exports to Japan. Also South Korea and Romania were attractive destinations in. 6

7 The year will be marked by a big fall in exports, like during the first of the year, down by approx. 57,000 t. compared with the corresponding period a year earlier. Almost all the Member States are hit by a fall in trade performances, notably Denmark (-14%). Japan and Russia -as purchasers- are less present: eg. between January and March Japan s imports from the EU were reduced by 24%. 1st Quarter Export of pigmeat Change compared to the same period in the previous year Total decrease of export volumen = Tonn Change in tonns BE BG CZ DK DE EE EL ES FR IE IT CY LV LT LU HU MT NL AT PL PT RO SI SK SF SV UK For the year as a whole, the fall is estimated at 19% (on the basis of the data available from January to April) Breakdown of pigmeat exports to third countries by Member State EU : Tonns = Mio T = Mio T = Mio T = Mio T (est) BE DK DE ES FR IE IT HU NL Öst PL PT SF SV U.K. Other 7

8 2. SELECTED NATIONAL MARKETS 2.1. Belgium (4.6% of EU-25 production) Production down in (-1.8%) despite a rise during the first of the year (+1.6%). Fall in prices (-6.5%) despite a recovery during the last of the year (+3.9%). Big fall during the first half of the year (-11.5%). A recovery would be looming in the first of 2008 (+9.2%) Germany (22.2% of EU-25 production) Rise in production continues. Marked rise during the first half of the year (4.1%). Modest rise during the second half of the year (+2.2%). Last year s prices rose considerably (+4.8%). For the year as a whole, the prices will fall also considerably (-14.3%). The fall will continue during the first of 2008 (-2.7%) Denmark (8.4% of EU-25 production) Big rise in Gross Indigenous Production (GIP) during the first half of (+3.3%). Same trend will continue during the second half of but more intensely (+4.6%). For the year as a whole, the rise will reach 3.9%. Last year s prices went up (+5.1%). This year s prices will go down (-8.6%) annual average-, more markedly during the second (-11.8%) and the third (-11.7%). Nonetheless the fall will bring the prices only 4% down on. The downward trend can be explained by the rise in production and the slackening in exports to Russia and Japan. Sales to China are high but they are made up of by-products. Prices to continue to show downward trend during the first of 2008 (-4.3%) despite a fall in production (-2.9%) Spain (15.2% of EU-25 production) Slight rise in Gross Indigenous Production (GIP) by 0.8% to reach million head. The rise will be concentrated during the first (+2 %). Same trend in 2008 (+0.8%). Last year s prices were markedly up on (+7.5%), esp. in July and August. The seasonal fall came all of a sudden. It went on during the first of. It did stop neither during the second (-9.4%) nor during the third (-6.7%). Improvement hoped for during the last of and the first of2008 (+1.9%) France (10.5% of EU-25 production) Modest fall in production in (-0.2%), even stability, thanks to improved productivity of sows that compensates for the fall in the number of breeding animals. Well-oriented prices in, among the highest in the last years. The trend changed during the fourth of so that the year is characterized by a big degradation (-11.6%). At the same time animal feed is more expensive. Hence reduction in the farmer s margin. Recovery expected during the first of 2008 (+3%) compared with the first of. 8

9 2.6. Italy (7.3% of EU-25 production) Stable production this year (-0.4%). Production to show downward trend during the first of 2008 (-1.2%). Big fall in prices, estimated at 8.5% for the year as a whole. The suddenness of the fall took the experts by surprise. It would be due to a fall in consumption. Recovery expected during the first of 2008 (+4.7%) Hungary (2.3% of EU-25 production) Big rise in slaughterings thanks to higher numbers. Fall in prices. For the year as a whole, they would go down by 7% to be close to the Community average price (EUR 133 per 100kg) The Netherlands (5.6% of EU-25 production) This year s Gross Indigenous Production (GIP) will be very slightly down on (-0.2%). The fall would continue next year (-1.1% during the first ). The prices started to fall considerably during the first of. The fall increased in intensity during the second (-11.7%). And it will increase in intensity also during the third (- 13.8%). Very big fall for the year as a whole: -9.9%. No recovery during the first of 2008 (- 1.1%). 2.9 Poland (9.3% of EU-25 production) Reversal of trend. Weak prices and inflated costs overcome the momentum of Polish farmers. Many of them terminate business activity. The influence will be felt from the second half onwards when a big fall in production is expected (-8.4%). It will go on at least during the first of 2008 (-13.6%). The fall in prices continued during the first half of (-5.3%) and will continue during the third (-1.4%). The downward trend will reverse itself from the fourth onwards (+12%) so that the upward trend will be confirmed during the first of 2008 (+11%) The United Kingdom (3.3% of EU-25 production) Rise in production this year (+6.3%), particularly during the first half (+8.2%). Rise in prices during the second half of (+3.7%) so that the annual average was positive (+1.2%). Good trend also during the first half of (+5.1%), unlike what happened in most of the other Member States. The trend will reverse itself during the second half of the year (-1.2%). Nonetheless the annual average will remain positive (+1.9%). ANNEXES: 3 9

10 Annex I: «Gross Indigenous Production (GIP) of Pigs ~ EU-25 ~ x 000 head» AT B DE DK ES CZ FR UK GR IE IT HU NL PT PL EU-25 YEAR %06/05 %07/ %06/05 %07/06 %06/05 %07/06 %06/05 %07/06 %06/05 %07/ JANUARY / FEBRUARY / MARCH APRIL / MAY / JUNE JULY / AUGUST / SEPTEMBER OCTOBER / NOVEMBER / DECEMBER

11 Annex II: «Production ~ EU-25 ~ in tonnes cwe.» AT B DE DK ES FI FR UK GR IE LU PT CZ EE CY LV LT HU MT PL SL SK IT NL SE EU

12 Annex III: «Consumption ~ Evolution and Forecast ~ EU-15 from 1997 to 2003 ~ EU-25 from 2004 onwards» Domestic consumption tonnes cw kg per capita «Consumption ~ Evolution and Forecast ~ EU-25» Per capita consumption of meat (in kg) perspectives goatmeat poultrymeat pork beef