Global meat prices grow despite overall food decline

Pork prices have continued to help the FAO's meat price index rise in 2017

Most global food commodity prices have continued to decline in 2017 but meat has again bucked this trend, claims the Food and Agricultural Organisation (FAO).

For the second succsessive month, the FOA’s meat price index increased, rising by 1.7% in April. This comes as other food prices, including sugar and grain, declined due to a waning trade and stable wheat and maize supplies.

Speaking to GlobalMeatNews, the FAO’s Italy-based senior economist Upali Wickramasinghe, described by the organisation as an “expert on all things meat”, offered his insight into why meat has bucked global decline.

April’s rise has been led by pig meat prices increasing in response to strong EU demand and continued record-high pork exports to China - the world’s largest pork consumer - he said. But to contextualise the growth, Upali said the rise needed to be compared to other periods when prices were higher. In August 2014, for example, the index peaked and the value for April 2017 is more than 20% behind the record figures.

Meat supply ‘rising’

Bovine prices were moving at a higher level since early 2014, whereas pig meat prices trailed at a lower path; poultry and ovine prices hovered in the middle,” Upali said.

Although global bovine meat output has been rising, including in the US, Brazil and China. In some countries, for example the EU, meat supply has been rising, but at a slower rate than, say 2016.

Elsewhere, supply trends suggest some tightening, including in Australia and New Zealand, whereas in Russian, the Republic of Korea [and] Japan, meat supply is either growing slowly or declining.

International meat supply is tightening in conjunction to domestic supply, particularly in China, which has “come under pressure,” Upali said.

China’s strict environmental tax on meat producers and a bird flu crisis earlier in the year is having a big impact on local supply. Efforts to contain the disease have hit local producers and increased import demand for both pork and poultry, but this could be tricky for the future; the EU predicts an increase in meat supply, but production will rise at a slower pace than in 2016.

Upali said supply issues should ease as the year progresses, but he did not speculate on whether the meat price index will continue to defy global decline in food commodity prices.

The United Nations agency FAO publishes a monthly trade-weighted index of international prices for five major food commodity groups: sugar, vegetable oil, cereal, dairy and meat.

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