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The unexpected 'heatwall' in the first half of September has delayed the growth of the pigs. The structural drop in the supply of live pigs in Germany has put a strain on the German price, causing an atypical evolution in September (+1, +5, repetition, and finally -6). The linking of these two factors has supported the Spanish price during all September, which is more than would be expected.
Germany has less pigs and looks for them in its adjacent countries (The Netherlands, Denmark, Belgium). The will to keep the abattoirs working at their maximum capacity has crashed against the hard fact of the scarcity of pigs. Two weeks with very negative margins have forced the German slaughterhouses to really reduce their activity with the resulting collapse of the price.
The prices in US (with monthly record slaughterings now) and Canada are free falling since June. Their prices do not reach €1.00/kg carcass. Pay attention! It is obvious that in the world markets, we, the Europeans, have little to do right now. In a perfectly globalised world, we must not lose sight of what is happening in North America. They currently have the trumps in their hand when it comes to selling.
The return from the Summer holidays has resulted in a good demand in Europe. The stocks are not brimful, and an extreme drop in prices in Europe is not expected. Nevertheless, the two national holidays in Spain (October 12th and November 1st) in the next five weeks will make the price fall.
Europe will only be able to go on with its prices (65% more expensive than in North America) whilst it can absorb its production and the specialised exports to Asia are not interrupted. No signals appear for the moment, but nowadays everything changes very quickly...
We think that in November, the Spanish price will drop quite more than in September, but keeping comfortably over the cost prices. For now, the facts are these.
Comparing the Spanish sluaghterings during the first 9 months of 2016 with those of 2014, we see that in 2016, 16.50% more pigs than in 2014 have been slaughtered. As we said in our last comment, it is surprising that this important progression has taken place without penalties in price (we are now heading the EU prices).
The last Latin world chess champion was José Raúl Capablanca Graupera (his mother, María Graupera was born in Darnius, Girona). His is this sentence: “The good chess player always has good luck.”
Guillem Burset
