Inside Pigs
Pig price surrenders, rights attract
Pig rights have become slightly more expensive in recent weeks. It is in stark contrast to the pig market. Just when the Dutch price is in line with the German price, the VEZG listing comes with bad news.
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The trade in pork rights has no longer been determined by the market for a long time, but by politics. This became more apparent in July when rights rose in value, but the market found itself in an uncertain situation.
Offer of rights under pressure
The fact that the ministry wants to come up with a purchasing scheme puts pressure on the supply of pig rights. This is because the prospect of fewer rights offers room for higher prices. We now have to wait for the rule to be implemented, because it raised more questions than it answered. And in addition, much is still unclear; where the 1 for one demolition fee advocates, the other states that this is indeed included in the scheme.
Another question is: which companies will participate? There are already various regulations for pig farming. For example, there is a stopper scheme that gives companies without air scrubbers the space to leave the sector in 2020. One can also use the Environmental Quality Regulation, so now there is also the 'warm remediation of pig farming'.
In any case, what is certain is that the price of pig rights has risen. In the South region, the price went from €125 per right (June) to €130 per right (July). Even higher prices are quoted. In the East region the price goes from €60 per right (June) to €70 to €75 per right (July) and the Other region ends with a price of €65 per right. The prices in the last two regions are striking, because there is a surplus of allowances there.
Pig prices are falling
The fact that the rights market has lost its grip on trade is underlined by the pig market. For example, the VEZG quotation from 19 to 25 July yields a price of €1,41 per kilo, a minus of €0,03 per kilo (compared to the price for week 28). Tönnies and Westfleisch do take note stable prices (€1,44 per kilo and €1,42 per kilo), but the drop on the stock market does not bode well for next week.
In the Netherlands the declines continue. For example, the price of Compaxo drops to €1,27 per kilo and Van Rooi comes to €1,35 per kilo. Meanwhile, supply and weights show a further decline. However, the slaughterhouses indicate that there is insufficient demand to sustain the market. The question now is: how will the balance turn out?