The balance in May is disappointing for the Spanish producer: in the four market sessions in April the price has only increased by €0.02. Every week the market faces reality and the price does not rise as much as other years in spring.
As we have mentioned on other occasions, Europe and its Common Market are our sphere of action (the same rules govern in this setting) and we are growingly subject to its behaviour. Our market behaves noticeably in the same way as the European markets, and it cannot evolve independently from them, not any more.
Due to reasons that are simply biological, the supply of live pigs falls. In the south of Spain a very short supply is reported.
Although the European exports have behaved very well so far this year (the Russian embargo has been compensated), this is not enough. The pork stocks are very abundant, and as the months go by they become more worrying and disturbing. The slaughterings are burdened by these plentiful stocks, and no enthusiasm is seen at all at the abattoirs for reducing their activity.
The domestic European consumption is still modest and has a low profile. The bad weather has not favoured the barbecues in Germany and it is still too early for the summer pork consumption in the south European coasts. The stocked up pork will soon return to the market, and it will not help neither.
The European production is expected to be 2% higher than in 2014 (the sow censuses has dropped, but the sows remaining are very efficient and prolific), and this 2% adds to a surplus market, and it has a clearly devastating effect on the prices.
In the absence of important health problems or of the appearance of some miraculous destinations for the pork surplus, a complicated and difficult autumn is foreseen. It seems that all the European producers will have a bad time, and that the less competitive ones will go into crisis.
As we already pointed out in previous comments, it is essential that the competent authorities take action, whereas it is establishing restitutions for the exports (a measure that would be unanimously supported by all the operators) or helping (with effective measures) to open the few markets that are not accessible currently.
As the Englishman John Milton said: “The main wisdom is knowing what we have in front of us in our ordinary life.”