Vion fine-tunes the course on the Dutch pig market

The day after an animal infected with African swine fever was found in Germany, it became clear that the pig price in Germany has been hit hard. The VEZG quotation plummeted by €0,20 to €1,27. There has also been considerable price pressure in the Netherlands, but at the same time we can still export to China and other lucrative Asian countries. Perhaps even more than before, now that Germany (an important supplier) has been denied access. There has also been pressure on the European meat market, as German slaughterhouses dump large volumes on the market.

Reset Dutch market
This cocktail of factors also forces a reset of Dutch quotations. However, at the end of last week, the price direction in the Netherlands was still very unclear. Some market participants opted for a reduction of €0,15, others thought a correction of a few cents was sufficient. The DCA Stock Price ultimately fell by €0,05, with the comment that this quotation is a provisional indication. The final balance will be drawn up on Wednesday evening. With the reduction of €0,08, Vion remains in the middle between negative and milder scenarios.

The question now is how other Dutch slaughterhouses (Van Rooi, Compaxo, Westfort and Pali) will respond. Will they choose the provisional line of the DCA Stock Exchange Price, will they follow Vion, or will they implement reductions of German proportions? Much of this will depend on how the German market reacts on Wednesday afternoon. A further German reduction is not unlikely, but unchanged, the market situation will undoubtedly improve in the context of more peace. 

Criticism of German reduction
The criticisms that have erupted in Germany regarding the significant price reduction are remarkable. Fuss, a slaughterhouse and meat processor in the state of Bavaria, continues to pay suppliers €1,47 per kilo. The price reduction of €0,20 is seen as unnecessary by the company. Tönnies indicates that a rapid stabilization of the market is necessary. Germany's largest meat company sees particular benefit in convincing the Chinese that an import stop is excessive, given that ASF has been detected in 1 wild boar.
Due to the measures, it is also unlikely that the virus will appear on German pig farms. Whether China will heed the call seems unlikely. The country announced Saturday resolutely to ban German pork for the time being. When it comes to food issues, people often err on the side of caution. 

In other major European pig countries we see a mixed picture. The Danish cooperative Danish Crown has lowered the quotation by 7 cents to €1,38. The Spanish listing remains stable, but that is logical. Spain neither imports nor exports live pigs to or from Germany, unlike the Netherlands and Denmark. The Belgian Danis is still considering a next step.