Falling pork prices in Europe: a domino effect from China

Published on :

After two years of positive economic conditions and profitable pig prices, French and European breeders are now going through a difficult period. French quotations have been declining for more than two months, and this is not the only source of concern.

« It unscrews Breathes Philippe Chanteloube, director of the Cyrhio cooperative, taking a last look at his cell phone. At issue: the decline in Chinese demand.

« European exporting countries can no longer sell to China. This is the case in particular for Spain », Europe’s leading pork exporter to the Chinese market. Result : ” Overnight, Spain switched its merchandise back to the European market causing a downward spiral in prices », Explains the director of the cooperative.

The Middle Empire drastically reduced its purchases as it had sharply increased its imports since the ravages of swine fever. ” It is also very complicated for Chinese breeders in terms of the price., explains François Valy, president of the National Pork Federation. So the state has decided to shut down imports to raise the domestic price and when it has gone up to them, they will reopen. »

Scissor effect

Why this drop in prices in China? Information on the country’s production shave plots, but Jean-Paul Simier, economist specializing in agricultural markets and contributor to the Cyclope report, « don’t think Chinese production goes back “. His hypothesis: it is rather that many herds are liquidated in connection with health problems and an increase in the cost of production. ” So there are a lot of pigs coming into the market. The European pig is losing its aura.

Double trouble for breeders, the price of food is also increasing in Europe. ” China bought a lot of soybeans, corn, wheat. Everybody’s buying so prices are going up », Relates Philippe Chanteloube. And to add: ” For now, we do not see the end of the drop on one side and the rise on the other. »

With this scissor effect, the activity is already no longer profitable for French breeders. François Valy did the accounts: “ Knowing that 70 or even 75% of our expenses are food, it lacks on average 30 euros per pig to balance. »

It’s hard to say how long this will last. Jean-Paul Simier believes in any case that if in the short term, China has reduced its purchases, probably for several months, it should remain structurally in deficit. In the medium or long term, it could therefore once again become an importer of pigs..

.

Leave a Comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.