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Acording to FAS (USDA), elevated swine slaughter, mostly in Spain and Germany, will result in an excess supply of pork that cannot be absorbed by the current level of EU demand. As a result, the EU is forecast to export a record volume of pork in 2015. The current negative market conditions are anticipated to result in a smaller sow herd, and as a consequence reduced pork production and exports in 2016.
Based on the forecast slaughter and weights, pork production is estimated to increase to a record volume of 23 million metric tons in 2015, earlier reached in 2007 and 2011. With the sluggish domestic demand, increasing exports is the only option to relieve the market. This year, EU exports are expected to increase to record volume of 2.35 million metric tons, with China as the main growth market. But given the unrest in the sector, margins are assumed to be tight. Exports are supported by the low domestic carcass prices resulting from a weakening Euro compared to the US$ and the Chinese Yuan during this past year. In 2016, however, EU pork exports are forecast to decline mainly caused by the recovery of U.S. pork exports to Asian destinations.
FAS Posts forecast that the total EU sow stock will be cut by about 135,000 head in 2015. Increased efficiency will result in only a slight reduction in the pig crop and slaughter.
Tuesday September 15, 2015/ FAS-USDA/ United States.
http://gain.fas.usda.gov
