W32: Pork Update

In W32 in the pork landscape, the Food and Agriculture Organization (FAO) reports that the meat price index reached an average of 117.8 points in Jul-23, a decrease of 0.4 points (0.31%) compared to Jun-23. On the contrary, global pork prices continued with an upward trend, rising for the sixth consecutive month. This increase is attributable to persistent supply constraints in the United States (US) and Western Europe, coupled with robust seasonal demand.

Brazilian pork foreign sales registered a significant growth of 11.5% year-on-year (YoY), reaching USD 245.55 million in Jul-23. China was the primary Brazilian pork importer, contributing a substantial share of 37.8% to total imports. Brazil's pork industry also capitalized on opportunities in alternative markets, such as the Philippines, importing USD 27.02 million (+39.0% YoY) despite grappling with African Swine Fever (ASF) challenges. The expansion is reflected in both pork export volumes (+7.5% YoY) and average prices (+3.7% YoY), underscoring the quality and competitiveness of the product in the global market. Amid volatile global conditions, Brazilian pork continues to be in demand due to its quality and flavor. This reinforces Brazil's strong presence and positive influence in the global pork trade sector.

The Danish weaning market registered a price decline in W32 following nine weeks of stagnation, with weaners priced USD 5.14 per head cheaper than in W31. The Danish weaner exchange experienced a notable shift in rates. The latest quotations introduced significant price reductions, with negative porcine reproductive and respiratory syndrome (PRRS) piglets traded at USD 102.04 per head and PRRS-positive piglets at USD 100.57 per head for 30 kg weaners. However, W32 weaner rates still reflect a YoY increase of USD 49.18 to 50.65 per head, contingent on health status.

China is currently witnessing a significant pig culling surge driven by a fresh ASF outbreak. While the losses faced by Chinese producers are comparable to those encountered by farmers in the US and Canada, the culling strategy appears not to have the desired effect. Pork prices are expected to rebound by Sep-23. However, the pig population recovery is expected to be gradual, prompting China to increase its pork imports. This shift is likely to alleviate pressure on the hog industry in North America, with the US expected to emerge as a key pork supplier.

Lastly, the commercial pork cost in Russia surged by 7% WoW at the start of W32 and a significant 20% YoY increase, reaching an eight-year high. The price surge is attributed to recent shortages, with meat producers struggling to meet demand from wholesalers and processors. This trend is expected to persist in the coming weeks. This rise in pork prices aligned with the previously elevated chicken prices, prompting processors to turn to pork. According to Russia's National Statistics Service (Rosstat), live pork production grew by 5.9% to 2.7 million metric tons (mmt) in the first half of 2023.