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NPA to push for pig supply chain code of conduct

10th May 2019 / By Alistair Driver

The NPA is to press for a pig supply chain code of conduct as part of a drive to introduce more transparency in the supply chain.

Zoe Davies1Chief executive Zoe Davies is keen to discuss the issue directly with Defra after a frustrating couple of months during which UK prices have appeared to be totally out of step with what is happening in the global marketplace.

“We have lots of angry producers contacting us wanting to understand what is going on. But there is currently very little transparency – and it is impossible to provide those answers,” she said. 

The EU-spec SPP is now finally on the up on the back of increased demand for pigmeat from China. It recorded its largest weekly increase since August 2016 last week, rising 1.84p to average 141.68p/kg, following smaller increases in recent weeks.

However, the price is still 5p behind this time a year ago and the gains come nowhere near to those seen in the EU and other parts of the world since early February on the back of rising demand from China.

“Market reports suggest that supply has become tighter which is adding more support to the price. Furthermore, demand is reportedly a touch stronger, with a number of processors operating a full week, despite the bank holiday,” AHDB said in its weekly market analysis.

However, contract prices this week have yet again failed to deliver, going up by 1p at best. 

The EU reference price soared from 117p/kg in early February to over 146p/kg by the end of April. Most major pig producing countries have seen massive hikes over that period, including Germany (122p/kg to 154p/kg), the Netherlands (106p/kg to 138p/kg) and Denmark (110p/kg to 137/kg).

In contrast the UK price is still only fractionally above where it was at the start of February. The graph below highlights how UK prices are lagging behind. 

EU UK prices

Zoe said the latest increase was an embarrassment and would do nothing to quell producer anger. “Yes, prices are now finally moving in the right direction, but nowhere near fast enough. Given what is happening in the global marketplace, we expect to this to be the start of a sustained upturn for UK pig producers, and token gestures like this just aren’t good enough,” she said.

“The events of the past two months have highlighted once again the lack of transparency in the pork supply chain. We are therefore keen to work with Defra to look further at how we can introduce more transparency into our pricing systems – and to push for a code of conduct for the pork sector.'

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