Weekly Product Updates

W40: Pork Update

Frozen Pork Ham & Shoulder
Published Oct 13, 2023

In W40 in the pork landscape, the global pork trade has experienced a turbulent period over the past five years, marked by animal disease outbreaks, geopolitical challenges, and the impact of the COVID-19 pandemic. Despite these challenges, the annual global growth of pork is forecasted to increase by 0.7% year-on-year (YoY).

Several factors are influencing the dynamic nature of the global pork trade in 2023. Brazil and the United States (US), known for their low production costs, maintain a competitive advantage, but the level of competition is intensifying. A 0.7% annual growth in global pork consumption is forecasted through 2030, driven by declining global inflation, population growth, and economic development. Asia's recovery in the meat and pork industry, particularly in response to the African Swine Fever outbreaks, is expected to fuel this growth. Brazil's low shipping and labor costs, have emerged as a key player and the second-largest supplier to China in 2022, given that China is the world's largest consumer of pork. In North America, the US and Canada possess advantages like access to affordable feed and key markets, contributing to the value of their pork products.

Furthermore, on October 5th, the Brazilian pig market witnessed mixed prices, with a notable increase in special carcasses in the São Paulo market. Sep-23 showed an overall rise in pork product values due to strong fresh pork exports and robust domestic demand. In São Paulo, the average price of a CIF pig remained steady at USD 24.61 (BRL 125), while special carcasses saw a 1.03% increase, averaging USD 1.93 per kilogram (BRL 9.80/kg). Center for Advanced Studies on Applied Economics (Cepea) and the Luiz de Queiroz College of Agriculture, University of São Paulo's (Esalq) Live Pig Indicator for October 4th reported a marginal 0.16% increase in Paraná, reaching USD 1.24/kg (BRL 6.28/kg), and a 0.16% decrease in Santa Catarina, reaching USD 1.20/kg (BRL 6.12/kg). Prices remained stable in Minas Gerais USD 1.27/kg (BRL 6.47/kg), Rio Grande do Sul USD 1.21/kg (BRL 6.17/kg), and São Paulo USD 27/kg (BRL 6.47/kg).

Paraguayan pork exports have experienced significant growth, driven by favorable international market conditions. In the first nine months of 2023, Paraguay exported 5.08 thousand tons of pork, marking an increase of over 500% compared to the same period in 2022. These exports generated USD 12.8 million in revenue, reflecting a substantial rise of USD 11 million compared to Q3 2022, according to data from the National Animal Quality and Health Service (Senacsa). Throughout Q3 2022, Paraguay shipped an additional 4.30 thousand tons of pork, a total volume of 5.08 thousand tons exported, a significant surge of 558% compared to 2022, when only 772 tons were exported.The value of the exports, measured in FOB terms, improved by 593%. In Q3 2023, Paraguay generated USD 12.8 million, a substantial increase of USD 11 million over the revenue generated during the same period in 2022, which was USD 1.8 million.

The optimistic international market conditions have boosted pork exports from Paraguay. The main destinations for these exports at the end of September were Taiwan (54%), Uruguay (28%), Georgia (15%), Brazil (2%), and Angola (1%).

Lastly, in the first seven months of 2023, German pork exports are facing a notable decline dropping by 20%. A significant contributing factor is the lower supply of slaughtered pigs in Germany, reducing the amount of pork available for foreign trade. The turnover of pork and by-products from January to July 2023 decreased by 14% compared to the same period in 2022. Most of the German pork, accounting for 75% of the overall amount, continues to be directed toward the European Union (EU). The primary recipients of German pork are the Netherlands and Italy, holding a quarter of the market share. Nevertheless, exports to these two nations have seen declines of 9% and 10%, respectively, in comparison to the export volume from the same period in the previous year. Several factors contribute to this export decline, including the effects of African swine fever (ASF), which have led to supply bans in Asia. Additionally, the high price level compared to international standards has impacted exports. Even within the EU, German exports have fallen by 13%. The reduced pig population in Germany has also limited the amount of meat available for export.

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