Analysis Pigs
How the piglet market takes a surprising turn
In other years, piglet prices had long since declined at this time of year. The expectation in the market was that piglet prices would soon fall, but now the market is suddenly picking up. Where does this surprising twist come from?
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The mood at the piglet market cannot be summarized in a few words and goes in all directions. The individual view of a trader is highly dependent on how he is positioned in the market. Those who are highly dependent on the Spanish market are much more negative than those who rely heavily on Germany. Sales on the domestic market are somewhere in between in terms of mood.
Spanish sales are declining
The negativity surrounding the Spanish market is because sales to Spain have been showing hairline cracks for a few weeks. This is also well explained. After all, piglets that are now being imposed will only come onto the market as fattening pigs once the tourist season is well and truly over. The weakening Spanish demand is also evident from the export figures, which have shown a downward trend for a few weeks in a row, but are still above 20 (until week 30.000). The numbers will probably drop further in the summer months. The Spanish piglet price is now on the decline and fell again last week, this time by €2,50 to €86,50 per piglet.
German pork farmer gains confidence
The mood on the German market is much more positive. Due to the significantly reduced sow herd, the supply of piglets is downright scarce. The scarcity is further exposed by the increasing demand from German fattening pig farmers. Due to record high pig prices, confidence in the fattening industry is increasing. This recovery received an extra boost in the past week due to the increase in the price of pigs in Germany. This is also pushing up the Dutch pig market, although Vion is putting the brakes on this week. The German piglet price (VEZG) increases this week by €3,50 to €87 per piglet. Few people had seen this surprisingly big step up coming. This is because surcharges on the German market have come under some pressure in recent weeks.
Dutch market in confusion
The divergent price movements in Spain and Germany are confusing the Dutch market. Actually, the piglet price seemed to be increasing after a seasonal decline, as we did last week also wrote. However, the rising German price gives a different view on the matter. Although the supply of piglets is increasing seasonally, the market is still characterized by scarcity. Now that the broken weeks are over and slaughter is taking place again, more placement space is becoming available again. As a result, the scarcity will continue for a while, traders think.
Even though many traders are not keen on a price increase, the DCA BestPigletPrice is still showing an increase this week based on the statements. The step up is indeed modest compared to the German price violence, but with an increase from €0,50 to €78 the BPP does set a new record.
Click here for an explanation of the DCA BestPigletPrice