Germany

Tonnies' plant closure to add pressure on pig prices

Pork

At the beginning of June, the EU average pig reference price was around €163/100kg.

Posted on Jun 24 ,11:55

Tonnies' plant closure to add pressure on pig prices

Halted operations at Rheda plant, owned by Tonnies, will have an impact on the pig prices in the EU market since is hard to believe that the company will manage to divert the pigs to other slaughterhouses.
At the same time, pork imports from Tonnies were suspended by China and that could be the start of a new policy for China's meat imports from countries and processing plants impacted by COVID-19, believes Bethan Wilkins, senior analyst AHDB.
"Reports indicate China has already increased inspections of imported meat, following the cluster of coronavirus infections linked to a wholesale market in Beijing. Plants in the US and Brazil may be particularly vulnerable if this course of action is pursued, with many plants in these regions suffering serious outbreaks. Clearly though, the EU is also not immune to these difficulties.

Ultimately, China is still acutely short of pork. So far this year, large imports and releases from state reserves have been used in an attempt to reduce the high domestic pork prices, with some success. Any action that limits the import supply ultimately risks pushing pork prices up again. However, at the moment, preventing recurrence of COVID-19 is also a priority. Although it is highly unlikely that people can contract COVID-19 from food or food packaging, according to the World Health Organisation, caution over imported meat may well be another challenge facing suppliers to the Chinese market this year", she said.
Rheda plant had a slaughtering capacity of more than 100,000 pigs per week and that could raise some difficulties for countries that export live pigs to Germany for slaughter.
If the supplies are not diverted to other slaughterhouses in Germany, the average pig prices in Europe are supposed to drop in the following weeks or months. The impact is expected to be observed in the market starting this July.
At the same time, the plant closure may raise problems for countries that are importing large volumes of pig meat from Germany, such as Romania and Bulgaria, which are supposed to look for new suppliers.

IN mid-June, a COVID-19 outbreak was reported at Rheda slaughterhouse. 1,300 employees have been found infected with the novel coronavirus. This is the largest COVID-19 cluster reported so far in the EU. The company decided to halt the activities in Rheda plant for a couple of weeks.

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