Although UK prime pig prices are coming under seasonal pressure at a time when feed prices are increasing, there could be some cause for optimism for the autumn and winter.
Retaliatory action by Chinese authorities against the US president’s imposition of tariffs on aluminium and steel imports has seen tariffs on US pork into China increased to 62 per cent.
The net result according to Quality Meat Scotland (QMS) is potentially increased competitiveness for UK and EU pork on the Chinese market in the second half of 2018.
This will be at a time when pigmeat production is expected to continue rising in the UK and across much of the EU.
Iain Macdonald, senior economics analyst with QMS, said: “On an optimistic note, market prices in China have shown some recovery, rising by 12 per cent between late May and the end of July, suggesting that supply has tightened and imports may need to lift once again. If this is the case, UK and EU processors are well-placed to supply them.”
Nevertheless, right now, the GB Standard Pig Price edged downwards to end July at 150.3p/kg at a time when tight global grain supplies were pushing up feed costs significantly.
Mr Macdonald detailed several reasons for this year’s price slide, including a well-supplied domestic market, lower consumer spending and, because of the knock-on effects of flat EU exports, UK pigmeat being less competitively priced on the export market.
However, Mr Macdonald pointed out the Chinese market accounted for almost half of global pigmeat consumption and while a well-supplied market there saw wholesale prices fall by more than 40 per cent between their 2016 peak and May of this year, there had now been some recovery.
While EU pigmeat into China faced strong competition from the US in early 2018, the situation had now changed as a result of the US–China tariff wrangles.