Mixed picture in the EU pork market
Bottlenecks in the supply chain in the EU pork market is drawing a mixed picture across the continent. There is an imbalance between supply and demand in the EU, which has led to a very turbulent situation with great uncertainty. Besides the closure of Tonnies-Rheda unit, several other pig processing units have been impacted by COVID-19 and lost access to the Chinese market. "This obviously has repercussions on the Spanish market, and even though here there is a certain balance between supply and demand, the price of meat is falling.
The Spanish packing plants that can still export to China, although slower due to the measures implemented by COVID-19, are taking advantage of the gap left by the other packing plants in Europe and reaching 37% of total Spanish exports. These exports are what are sustaining the market, both in quantity and price.
However, the packing plants unauthorized to export to China are suffering the pressure of excess meat. They cannot lower their production because they have fixed costs to bear. In addition, domestic consumption, with the decline in tourism, has been greatly reduced," declared Mercedes Vega, General Director for Spain, Italy and Portugal, Genesus.
In 2019, China was the main non-EU destination for the Spanish pig sector, absorbing 27.2% of exports in volume (663,892 tonnes) and 23.0% in value (1,441 million euros). Another pig market that seems to recover gradually is Italy, which has seen prices rising since mid-June. " Price is 1.18-1.19 euros/kg live with average weight dropping to 173.5 kg compared with 176.6 kg two months ago. All the market indicators show a continued rise in prices," added Mrs Vega.
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