Inside Pigs
Too much unrest for higher pig price
It is restless in the pig market. After the quotes were marked down at the beginning of 2020, there seemed to be room for upward movements again. However, slaughterhouses are very reluctant, due to the outbreak of the corona virus in China.
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In terms of sales prospects in China, it was a week of extremes. This is how Rabobank gave in to them quarterly report indicates that the Chinese will probably import much more pork in 2020 than they did last year. Although competition from the US and Brazil is increasing in the Chinese market, the prospects for European exporters are excellent.
At the same time, the coronavirus causes great uncertainty in the short term. In particular Vion expressed their concerns about this, but other slaughterhouses are also unsure. Danish Crown, for example, indicates that the situation will become critical if Chinese importers also fail in the coming weeks.
Hauspreise at Tönnies and Vion Germany
And then there were the house prices at the large slaughterhouses across the border (Tönnies and the German branch of Vion). They ignored the increase in the German pork price (VEZG), which rose by €0,03 last Wednesday to €1,85 per kilo. This also has an impact in the Netherlands. With the exception of Compaxo, which gained 2 cents, the other Dutch slaughterhouses also kept their prices the same. The will to increase does not seem to be there. Moreover, Compaxo still had some catching up to do.
The question is, what next? Opinions in the market are strongly divided on this. The vision of slaughterhouses is clear: reductions are currently more appropriate than increases. The cold stores in Europe are full and the unrest in China is not helping sentiment on the meat market.
Stock market price unchanged
Various Dutch pig traders are aware of the tension and are calling for an unchanged DCA Exchange Price 2.0 at DCA Markets. The idea is that this will keep you calm on the market. There are also traders who want to follow the increase in Germany, even though the slaughterhouses have not followed it. In short, there is friction. However, based on the statements, the DCA Exchange Price 2.0 for slaughtered pigs remains unchanged at €1,73 per kilo. The price of live pigs remains at €1,40 per kilo.