By Peter Crichton
SIGNS are emerging that the recent modest price rise seen in the UK may prove to be short lived and could soon be converted into further losses.
Although this weeks AESA has risen by 1.7p/kg, spot quotations are beginning to show negative trends.
Meat traders are quoting a glut of pigmeat throughout the EU, with at least three months supply in cold stores. The continuing closure of the Russian market that used to absorb up to 30% of all EU production is also adding to the problem.
The fall in EU values has left UK sow and heavy pig exporters under great pressure to find homes for their products, because in this country there is almost no traditional demand for manufacturing meat in this category.
Latest weekly prices released show sharp falls in every major EU pig producing country with Spanish producer returns slumping by a massive 13.3% and both Belgium and Germany off the boil by 6.2%.
At the same time hopes over further interest rate cuts in the UK have kept the Pound relatively strong still standing at DM2.77, whereas exporters and importers had been hoping that by now the Pound would be nearer DM2.60.
The recent Malton announcement to revert to an AESA linked price has meant that Malton can now undercut many of their competitors at the selling end. This is also believed to have helped to check the recent UK price rally.
- Peter Crichton is a Suffolk-based pig farmer offering independent valuation and consultancy services to the UK pig industry