19/07/2006 
Good pig market prospects? - A comment by ISN market expert Andreas Beckhove
The market sentiment will remain positive on the European market for pigs mature for slaughter even after the second 2006 quarter. General conditions prove to be very beneficial for the pig keepers, and therefore prices rose as high at the end of June as they haven’t done for a two years’ time before in many European countries.
There are several factors which this positive price trend must be attributed to. Those factors might as well result in an autumn price level which would be comparably high. A globally increased demand for pork – a result as well of all those discussions about bird flu – is one of those factors. As a consequence, marketing opportunities are good for both the European and, in particular, the German exporters. Through this, the European pig market is being more than relieved.
So, for instance, German pork exports could be expanded again by another 10 percent (up to about 300 000 tons) over the first 2006 quarter, compared to last year’s sales. Meanwhile, a substantial part of those exports is supplied to Eastern Europe and Russia. The EU’s major competitor on the Russian market – Brazil – presently is not in the position to maintain its market share there. In consequence of the foot-and-mouth disease, which still is rampant in Brazil, and the restrictions Russia imposed on imports from Brazil made Brazilian exports towards Russia fall by almost 40 percent after all, compared with last year’s export volume.
It’s another factor, having a positive effect on the price level, that presently there is no increase in production throughout Europe, even though
The peak hit so far on the European market at the end of June certainly was a result, too, of the FIFA World Cup held in Germany. About 1.73 million fried sausages had been eaten by 11 million visitors during the so-called FIFA
There are several factors which this positive price trend must be attributed to. Those factors might as well result in an autumn price level which would be comparably high. A globally increased demand for pork – a result as well of all those discussions about bird flu – is one of those factors. As a consequence, marketing opportunities are good for both the European and, in particular, the German exporters. Through this, the European pig market is being more than relieved.
So, for instance, German pork exports could be expanded again by another 10 percent (up to about 300 000 tons) over the first 2006 quarter, compared to last year’s sales. Meanwhile, a substantial part of those exports is supplied to Eastern Europe and Russia. The EU’s major competitor on the Russian market – Brazil – presently is not in the position to maintain its market share there. In consequence of the foot-and-mouth disease, which still is rampant in Brazil, and the restrictions Russia imposed on imports from Brazil made Brazilian exports towards Russia fall by almost 40 percent after all, compared with last year’s export volume.
It’s another factor, having a positive effect on the price level, that presently there is no increase in production throughout Europe, even though
reasonableprices are being reported about along a wide front. Altogether, the EU forecasting board expects production to increase by only 0.8 percent in 2006 (compared with 2005). Primarily, this increase must be attributed to the enlargement of stock in Poland (+ 9.2 percent) and Germany (+ 2 percent).
The peak hit so far on the European market at the end of June certainly was a result, too, of the FIFA World Cup held in Germany. About 1.73 million fried sausages had been eaten by 11 million visitors during the so-called FIFA
fan parties– at just half time already! And be sure that all those private parties held around the international matches certainly had a positive effect on the pig prices, too!
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