May: Everything is new under the sun

April has gone by with a surprising change in the trend of the evolution of the Spanish market. The drop by €0.007, although minute in terms of money, is very significant and an undeniable sign of weakness.

There is no livestock in excess, and the abattoirs slaughter all that is offered to them, BUT globalisation is a fact, and it is very obvious in Europe. The European markets have many agile and very reactive communicating vessels.

In the last four weeks, Germany (always Germany!) has made the following movements: + €0.05, + €0.05, - €0.03, - €0.07 per kg of carcass, so finally the price has returned to the starting point. It looks like there was a bull market, especially due to the low supply, and because of the inability to transfer this rise in the price of pigs to the pork, the price has returned to where it was.

 

Reasons for pessimism

• The meat stocks are plentiful.
• The Russian market is still closed.
• The private storage operation has ended (the pork will be 'parked' in the deep freeze for some months. It will be released in summer).
• Pork consumption does not take off nor reacts.

 

Reasons for (a moderate) optimism

• The good weather season is coming, and with it the increase in temperature. The barbecues will respond. The pigs will be delayed and will not be abundant.
• The euro is still losing value with respect to the dollar.

The price has an upward trend, but we are sure that we will fall short of the €1.53 €/kg LW of two years ago or the €1.50 €/kg LW of last year. Well informed sources tell us tan they are unable to 'see' the Spanish price over €1.30 €/kg LW this year. We will see...

Fight, fight and figth... this seems to be the motto and the slogan. Let us take cover, because it will clear up.

Guillem Burset