UK pig producers are being warned further price increases are under threat from the impact of coronavirus on Chinese demand and rising Russian production.
Deadweight standard pig prices are currently tracking at about 162p/kg – 25p/kg higher than both the same week last year and the five-year average.
The spread of coronavirus in China will hamper farmers restocking pig herds that were wiped out by African swine fever (ASF), and cause production in the country to fall a further 15-20%.
This will cause global pork supplies to decline by a further 10% in 2020, according to agricultural financial service provider Rabobank.
This would see the country produce as much as 40% less pork than 2018 levels.
However, Rabobank warned consumption levels in the country are difficult to forecast, with many food service businesses shut down.
Chinese imports of meat were above, or close to, record levels across all species last year.
Rabobank said coronavirus and the Chinese authorities’ management of domestic pork prices is also complicating the outlook for trade.
Its latest report on the impact of ASF forecast that if prices are kept at their current level, production growth could stall and trade soften, while consumers benefit from more affordable pork.
If authorities allow prices to rise, there will likely be more aggressive re-stocking from pork suppliers, but at a less affordable price, it said.
Russians production rising
Pork market analyst Peter Crichton said Russians are also in a strong position to undercut UK prices after they expanded domestic pig production.
Overall, export tonnages rose 19% in 2019 compared with the previous year, much of which was in the fresh and frozen category, he said.
Russian farmers’ access to cheaper cereals mean they are likely to be able to compete aggressively with UK and EU export prices.
Spain, Germany and the US were the biggest exporters of pork to China in 2019.
US pork exports in 2020 are expected to increase by more than 17% compared with 2019, to total some 13.1m tonnes.