News Rabobank
Pork production in Europe will shrink slightly in 2022
Pork production in the 27 countries of the European Union and the United Kingdom will shrink by at least 0,5% this year, Rabobank expects. Prices will remain under pressure in the first quarter of 2022, as supply has to decline before prices improve. Imports from China are expected to fall further, by 10% to 25% compared to last year.
In the European countries and the United Kingdom, pork production increased by 2021% between January and October 2 compared to one year previously. Due to a decrease in demand, an oversupply has arisen. Monthly exports from the countries in the European Union and the United Kingdom remained below the level of 2021 in the second half of 2020. Rabobank expects this slightly declining trend in exports to continue in the first quarter of 2022.
The sow herd in several European countries, including Germany, continues to decline. Sector manager René Veldman in a press release: "This accelerated decline in Germany is due to the challenging market situation in combination with the previously announced new regulations. Moreover, the impact of African swine fever is significant. For Dutch entrepreneurs, attention to prevention remains essential. The prevention scan on the The Vitale Varkenshouderij website can help entrepreneurs with this."
Chinese pork imports fall
From January to October, 56% less pork was exported to China from the 27 European countries and the United Kingdom, compared to the same period last year. Pork from Brazil creates competition for Spain in particular. Other export markets were unable to compensate for the lower exports to China.
In 2022, Rabobank expects further growth in pork production in China, albeit less than last year. After a temporary recovery in the fourth quarter, pig prices in China have fallen again below cost price in recent weeks, Rabo experts say. "This indicates that the weak demand for pork will continue in the first quarter." The bank expects Chinese demand for pork to gradually recover in the second half of the year, leading to an increase in imports as well. "Yet China's pork imports are expected to fall by 10% to 25% or 400.000 tons to 1,2 million tons from 2021," the experts said.
Prices remain under pressure in the first quarter
Prices will remain under pressure in the first quarter of 2022, as supply has to decline before prices improve. Veldman: "We expect that low selling prices, together with high feed costs, will cause continued pressure on margins in the coming months. It is important that companies have a good picture of the development of their liquidity positions. Also take into account the scenario in which price recovery lasts longer than we now expect."
Linda van Eekeres
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