Germany's exit from non-EU pork markets opens doors for other exporters

Germany's exit from the non-EU pork market is creating opportunities for other European exporters in countries such as South Korea and the UK, according to sources, and the rising supply of German meat in the EU is expected to exert downward pressure on domestic prices.

"Once the health situation is under control, it may take Germany three to six months to re-enter the market," an exporter based in Spain said.

Foot-and-mouth disease was reported Jan. 10 at a water buffalo farm in Brandenburg and since then Germany has been blocked from exporting meat outside the EU. The ban covers all meat from animals susceptible to FMD, which includes cattle, sheep, deer and buffaloes, as well as pigs.

That has created opportunities for competing exporters, such as Spain, the Netherlands and Denmark, to take Germany's share of exports to South Korea and the UK.

German pork meat exports have declined in recent years due to African Swine Fever.

The UK banned imports of meat from Germany on Jan. 14, cutting off approximately 82,000 mt of annual pork supplies, based on trading volumes in the first 11 months of 2024.

Germany provided 15% of the UK's pork imports during this period, providing mainly loins and bellies.

South Korea banned German imports on Jan. 11, closing off the route for around 44,000 mt of its annual pork supplies, based on the same data for the first 11 months of 2024. South Korea, the word's forth-largest pork importer, mainly takes frozen pork bellies from Germany.

In turn, Germany's inability to export to third countries means its meat production will only be marketed within the EU. As a result, the additional supply of German meat in the European market is expected to pressure European pork market prices lower. Prices in 2025 are unlikely to achieve the levels they would have reached under normal conditions, Market participants said.

In the German domestic market, meat prices were already on a downward trend before the confirmation of the FMD outbreak on Jan. 10. According to EC data, as of Jan. 6, pork belly selling prices had fallen by 8.5% since Dec. 23. Additionally, German slaughterhouses experienced delays in their operations due to labor shortages while facing peak holiday demand, which also contributed to a decline in live pig prices in the country.

According to European market participants, the current restrictions on exporting meat outside of Europe are expected to exert additional downward pressure on prices not only in the German market, but also in the rest of the EU, due to the interconnected nature of these markets.

Pork meat buyers are hesitant to purchase German meat after the FMD outbreak, leading German sellers to offer more competitive prices.

In contrast to the downward trend anticipated for prices in the EU by a larger supply, the market expects firm prices for exports to third countries. According to Catalonia-based market participants, more opportunities for Spanish pork belly exports to South Korea are emerging.

The increased interest from South Korean importers in Spanish pork following the ban on German exports has further strengthened the already growing trend in prices of Spanish pork belly in South Korea.

Platts, part of S&P Global Commodity Insights, assessed the EU Pork Marker at Eur4,300/mt in the second half of January, up by Eur100/mt since the beginning of December.

The health alert remains in effect across the entire EU and the production chain continues to make efforts to prevent further advances of the disease.