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Over the course of October, the Spanish market saw very small, very limited price drops which allowed us to end the month at an absolutely record price of 1.42 €/kg live weight.
China broadcasts a desperate need for pork and the whole world responds by exporting all the pork available to the great Asian powerhouse. This is the skin of the matter, but there's more to discover.
The Chinese market is so rampant right now that no one knows how things will end up. The price has more than doubled from June of this year with prices rising all the more quickly in the last weeks (8% increase on October 9, 10% increase on October 16).
The only limit on European exports to China is established by the freezing capacity of the approved industries; prices in Europe are clearly evolving at a different level than in China: they are already historically expensive but they are held back by the reluctance of the Great Distribution to accept absolutely necessary and essential increases.
The situation is serious to say the least: the pork processing industry throughout Europe is losing huge sums of money weekly. Here's the real Gordian knot though: will the European Union accept the inevitable bankruptcy of a large percentage of its meat-processing industry without lifting a finger or batting an eye?
The fact that pork production is enjoying a boom (a renowned integrator told us about "orgy of profits") should not imply the ruin and disappearance of the processing industry (raw, cured, smoked, cooked sausages, etc.). The EU would do well to study the problem with the players involved and propose possible solutions or offer alternatives.
Meanwhile, life goes on... pork production's present is splendid and it's short to medium-term future looks promisingly positive: the situation in China (and by extension that in South-East Asia) is not likely to be solved for several years. The fight against ASF requires, among other things, the awareness of producers, the rigor and discipline of the authorities, much involvement and economic means to pay for this fight. We do not know what measures are being taken in China and whether or not they are effective.
In China now, as we have already mentioned before, the price is double the norm, a situation that does not seem sustainable. Indisputably the price of pork is inflating the Consumer Price Index (CPI). It will depend on just how bearable the CPI figures are for the Chinese authorities if drastic measures are to taken, not excluded by any source familiar with the intimacies of Chinese politics.
Wait and see from under a blanket of comfort and happiness could be the motto.
The great Aristotle expressed a thought that is very relevant to the euphoric members of the pig production sector. Concise, simple, very intelligible and definitive: "To know is to remember".
Guillem Burset
