After reaching this year’s price peak at €2.13/kg on July 1st, the index for EU Pig deadweight grade S EXW EU (BW56) has decreased continuously since then, with the last price assessment being at €2.03/kg on July 29th. However, while the price index decreased throughout the month, the market sentiment of the underlying countries was reported as main divers. While price decreases across the German, Polish and Spanish market drove the EU pork basket lower, the French market held steady during the month, limiting the downward potential.
Price drivers across the EU were reported similar, as supply outweighed demand throughout the month. Pork production volumes were reported as steady according to market sources, with a slight drop in slaughter weights. Demand decreased notably during the month according to industry sources, as the buy side covered their demand for the summer holiday period (July-August) in advance to ensure supply security. However, industry participants report that due to a weak start to the tourism season and subdued retail interest, current contracted volumes are considered sufficient.
While the sell side is not willing to offer large scale discounts to generate buying interest, processors are also unwilling to build up larger stock levels, as demand uncertainty surrounding the second half of the year persists, and storage costs remain elevated. This has resulted in constant price pressure on the sell side, supporting a bearish sentiment during July.
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