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Firm ground at last?

Europe as a whole has a flat depressive profile with the prices in the minimum levels of the last three years.

Monday 3 November 2014 (3 years 4 months 21 days ago)

The Spanish reference market repeated price in its last session in October, although after 16 consecutive weeks falling, it was about time. The price has fallen by €0.39/kg live weight (-26%). This situation is new: we had never lived such a persistent period of drops in the price with such a deep impact.

Firm ground at last?

Europe as a whole has a flat depressive profile with the prices in the minimum levels of the last three years, and it is holding its breath at the edge of the cliff awaiting for whatever could happen.

In the Iberian peninsula the supply is plentiful. Pigs are slaughtered at full machine and the livestock does not fall behind (although the average carcass weight stubbornly gains grammes week after week, the benign weather acts as a doping substance). If no disturbing factors appear, it would be logical to expect a quiet evolution of the price from now to Christmas, not excluding any rise if the abattoirs still press the accelerator.

We must not forget that the excessive differentials in summer between the price in Spain and Germany (the leading market in the EU) have disappeared, and the necessary and indispensable exports have recovered competitiveness.

The Russian market does not exist for Europe. This handicap does not find a remedy good enough, and the negative balance of the total exports remains within the EU borders. The domestic consumption figures show a retraction (2%?, 3%?). There still are important stocks and it will be necessary and essential to manage exportation excellently to enable a recovery. With or without Russia life goes on and pigs are slaughtered punctually.

The successful implementation of the animal welfare law has entailed an increase in productivity. The benefits in production have entailed their growth (more sows). In the immediate future more and more meat is to be expected. More meat in a market that is receding (Europe) needs, necessarily, the exportation to third countries. Clearly, the exportation is the only way out.

We think that from all the administrations of any field, including the European one, it is necessary and essential a helping approach to pork exportation. Every bit of help is useful, and it will surely be needed.

The British philosopher Francis Bacon said once: “When the danger seems light it is light no more.”

Guillem Burset

Guillem Burset


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