UK pig price to rise within weeks over China ASF crisis
© Tim Scrivener UK pigmeat prices will start to rise within weeks as China’s African Swine Fever losses create a vacuum in global supply, analysts say.
Informa’s Agribusiness Intelligence team have forecast that the resulting price hikes could be 20% or more in the US and 15% in Western European countries.
According to estimates by the US Department of Agriculture one million pigs have died or been slaughtered in China because of the disease.
See also: A guide to African Swine Fever and how to minimise the risks
The USDA calculates that the resulting breeding capacity losses mean the Chinese herd will shrink by 13% (59 million) to 374 million over the next 12 months.
In European countries, which have a significant spot market, the uplift is already being seen.
Pig market analyst and industry commentator Peter Crichton said the largest rises to date had been seen in Germany.
Over the past month prices there have risen by more than 30 euro cents/kg (25p/kg) to €1.70/kg (146p/kg).
However, the UK SPP, which is about 138p/kg (11 April), is yet to respond.
Contract-based market
Mr Crichton explained that unlike Germany the UK lacked any significant spot trade to react quickly to changes in global supply.
“Our market is based on long contracts of four to six weeks so prices change slowly in response to supply fluctuations,” Mr Crichton said.
He said that while the lack of upward movement in the UK was disappointing, the situation would change within weeks rather than months.
“Because the UK is only 46% self-sufficient in pigmeat we rely on imports to meet demand, Mr Crichton said.
“As contracts come to an end buyers will be forced to pay more for foreign pigmeat which is already priced well above our own,” he said.
With pigmeat already costing about £20 more for a 180kg pig the higher-priced imports should have a knock-on effect that will see UK values start to improve, Mr Crichton predicted.
Insurer sounds out demand for African Swine Fever (ASF) insurance cover
Rural insurer NFU Mutual is assessing the potential demand for policies which cover pig producers for potential losses to ASF.
As the disease threat to the UK pig sector grows the insurer has heard feedback calling for disease insurance.
To date it said it was unaware of ASF insurance in the UK and so wanted to determine what level of demand existed and what price would be viable.
It is working with the National Pig Association to collect views via an insurance questionnaire that would lead to an ASF insurance package in the near future.