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Small EU production growth expected in 2020, despite high prices
The EU breeding herd contracted by 3% in 2018 due to low prices, African Swine Fever (ASF) risk and/or environmental restrictions. High prices from April 2019 have contained the trend and stabilised the size of the EU herd in 2019 (+0.4 % year-on-year), thanks to expansion in ES (+3%) and NL (+8%), and despite reductions in DE (-3%), FR (-3%) and HU (-11%).
In 2020, EU pigmeat production should grow slightly as continuing export demand from Asia, particularly China, keeps prices high and favours higher slaughter weights. Growth will be driven by ES that is taking advantage of the opportunity in China. ES pork exports to China doubled in 2019. In 2020, ES will become the first EU producer in number of slaughtered animals, although not in volume due to a lighter slaughter weight than DE. Covid-19 should not significantly affect the pigmeat market except for some specific products for foodservice (e.g. suckling pigs for roasting in ES, PT).
EU prices should remain high in 2020, thanks to strong world demand
The surge of Chinese imports in 2019 drove EU pigmeat prices to close to EUR 200/100kg in December (+45% year-on-year). Since then prices have fluctuated above EUR 180/100kg. Carcass prices reacted slightly to Covid-19 but should continue at high levels while Chinese demand continues, despite the reduction in foodservice demand. The main risk remains the spread of ASF in the EU.
Apparent consumption per capita is expected to fall to 32.5 kg in 2020 (0.7 kg less than the previous year) as high prices favour other meats, particularly poultry.
Further growth of EU pigmeat exports expected in 2020
EU pigmeat exports grew by 17% in 2019 (-5% to UK, +25% to other countries), driven by Chinese demand, where the share of EU pigmeat exports doubled to 36%. Meanwhile, exports to other main trade partners fell significantly: South Korea ( 22%), the Philippines (-24%), the US (-24%) and Ukraine (-18%); while small increases were registered to Japan, Australia and Hong Kong. In 2019, the UK is the main export destination of EU pigmeat after China (22% share).
In 2020, Chinese demand should persist and total EU exports are expected to grow significantly (+12%)
Surge of Chinese pigmeat demand to continue in 2020
China continues to struggle to recover from ASF that has decimated its pig herd, and recovery will probably be delayed by Covid-19 related disruptions. In 2020, Chinese production should fall further (experts estimate a 15-25% drop year-on-year), maintaining a huge gap that cannot be covered by available world supply.
April 20, 2020/ European Commission/ European Union.
https://ec.europa.eu/
