Why aren't UK pig prices rising faster? NPA seeking answers
25th Apr 2019 / By Alistair Driver
UK pig prices are rising far too slowly for the NPA, as recent tiny increases are coming nowhere near the China-driven hikes being experienced in virtually all major pig-producing countries.
Producers are rapidly losing patience with the situation and are demanding answers. With this in mind, the NPA has been collecting information confidentially from members, which is shedding some interesting light on the situation – and is certain to be of interest to bodies like the Groceries Code Adjudicator (GCA).
The latest figures from AHDB show the EU-spec SPP reached 138.67p/kg last week, up just 0.36p on the previous week. Since the start of March, the SPP has risen by 1.24p. It remains 6.6p below year earlier levels.
The AHDB commentary points to signs of an imminent uplift in demand for UK pork, partly due to a sharp rise in EU prices making imported product less competitive here. Demand from China remains strong as it seeks to fill the huge gap in domestic production created by the ASF outbreak.
AHDB attributed the ‘sluggish’ uplift in the SPP to high storage levels, which it has blamed on Brexit stockpiling, and high throughputs in previous weeks following difficulties with factory breakdowns. A short kill week in the latest period, due to the Easter break, may have also had a negative impact on demand, it added. You can see the full analysis here
Meanwhile, across the rest of the world, including in many of our EU competitors, pig prices have soared on the back of the sustained surge in Chinese imports. The extent to which the UK is being left behind is illustrated in these figures included in the latest commentary from Genesus’ Jim Long:
The recent price trends - soaring in the EU, but flat in the UK - are highlighted by AHDB's EU reference price graph:
NPA chief executive Zoe Davies said: “Members are incredibly frustrated and understandably they want answers. At a time when they really needed support from processors, they are not getting it.
“The data on contracts we have been collecting from members is proving to be very illuminating and potentially very useful as we try to get to the bottom of what is happening here. The excuse that we are hearing about stockpiling is contrary to what retailers are telling us and will only hold for so long. I believe what we are looking at here is a deliberate attempt to delay the inevitable.
Last year, Grocery Code Adjudicator Christine Tacon announced a commitment to work with industry to explore improving transparency and access to prices along the supply chain. The aim, she said, was to help farmers and small producers see if they are getting a fair deal for their products.
“Forward quotes for imported loins are showing a 20% increase in price, so the fairy stories we are being sold just don’t add up in my view. I’m more than happy to be re-educated should processors feel the need to share, but what is clear is that without some very sensible explanation and soon, the GCA may well be getting a call” Zoe added.