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AHDB publishes upbeat outlook report for UK pig market

8th Jul 2020 / By Alistair Driver

AHDB Pork has published an upbeat UK pork market outlook for the remainder of the year, underpinned by tight supply, strong domestic demand and a healthy export trade.  

In its latest Pork Outlook report, the levy body predicts that high domestic pig prices seen during the first half of 2020 could be sustained for the rest of the year.

However, it warns that the situation is ‘not without risk’, including the potential for COVID-related import bans, while Brexit adds an air of uncertainty.

The SPP in the last week of June stood at 165.3p/kg, the highest level this year, up 0.37p on the previous week and 14.4 higher than a year ago. Despite the global market turmoil this year, the price index has risen steadily from around 162p/kg at the start of the year.

AHDB outlook 1

“So far this year, prices have shown little movement, remaining at a generally elevated level. It seems feasible that the situation will remain similar for the rest of 2020,” the report states.

“At present, the short supply of British pigs, strong retail demand and good export prospects are providing market support.

AHDB outlook 2“Although pig supplies are expected to increase again later in the year, we also expect export prospects to improve as the year progresses, which should help absorb extra supplies.

“Improvements on the Chinese market would also help support the EU market, limiting the risks of competition from lower-priced EU pork. Fundamentally, there continues to be a global pork shortage.”

AHDB stresses, however, that its forecast uses an optimistic demand scenario for COVID-19 recovery and assumes continued free access to EU market after January 2021.

“However, the situation is not without risk. High pork prices are largely contingent on good export prospects to China – if demand, or the ability to supply this market, is significantly disrupted, prices would come under pressure,” the report adds.

“Increased restrictions on trade with this nation, for example due to further spread of African Swine Fever in Europe, or a significant second-wave of coronavirus infections in China, are examples of plausible developments that could be disruptive.”

The report also notes that Chinese pig herd rebuilding is well underway, so there is a reasonable expectation that price levels will start to moderate next year.

You can read the full report HERE

And you can read further analysis in Pig World HERE

Report highlights include: 

  • Strong domestic demand - in the 12 weeks to May 7, total pig meat sales increased by 14% in volume and 22% in value, with sausages and bacon seeing the biggest overall growth. Preliminary AHDB estimates suggest this level of volume growth has compensated for the loss of the foodservice market.

AHDB outlook 3

  • Production - UK pork production is forecast to increase by about 4% this year, reaching 989,100 tonnes, due to a combination higher slaughter levels and rising carcase weights.
  • Imports - AHDB anticipates UK pig meat imports will be about 5% lower in 2020 than in 2019, at 898,000 tonnes. HMRC data shows the UK imported 273,000 tonnes of pig meat (including offal) between January and April, 51,000 tonnes less than in the same period last year.
  • Exports - in contrast, export volumes are forecast to rise by a further 6% to 307,000 tonnes. UK exports of fresh/frozen pork increased by 7% across January-April, totalling 81,000 tonnes. This growth continues to be driven by Chinese demand, with UK shipments 75% up on the year during the period.

AHDB outlook 4

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