Pork price may rise by 10% by the end of 2018

Analysis of the price food chain of purchasing prices for pigs to retail prices for pork, conducted by scientists of the Institute of Agrarian Economics, indicates a progressive price increase in all its links since the beginning of last year, which stopped only in May 2018.

Purchasing prices for pigs of I and II categories increased by 1.5 times during 2017 - from 29379 UAH/ton to 44278 UAH/ton. Last year, the largest price jumps were observed from May to June (11%) and from September to October (15%).

Since the beginning of 2018, the growth rates of prices have significantly decreased and during the January-April period averaged 1% per month. As of May 2018, prices began to decline and the average level of the purchase price for pigs of the I and II category was 44752 UAH/ton, which is 3.3% lower than in April 2018, said Olha Bodnar.

According to her, the dynamics of prices within each region varies significantly, so there is no consistency in leadership in terms of prices. In May 2018, in most regions, price trends corresponded to the dynamics in general across Ukraine. However, in the Kharkiv and Kirovohrad regions, prices were high - 48.7 thousand UAH/ton and 47.5 thousand UAH/ton, respectively. The lowest prices were recorded in Sumy (39.8 thousand UAH/ton) and Luhansk (37.2 thousand UAH/ton) regions.

The dynamics of wholesale-selling prices for pork of the second category as a whole repeats the movement of purchasing prices, the expert said. During 2017, their level increased by 38.4% and amounted to 74.59 UAH/kg at the end of last year. From January to April 2018, the monthly increase in wholesale prices is also about 1%. As of May of this year, their average price level reached 77.81 UAH / kg. The regional spread of prices is significant and is 2.1 times. At the same time, the highest prices were observed in Vinnitsa (90 UAH/kg) and Luhansk (95.26 UAH/kg) regions. The lowest prices were in Ivano-Frankivsk (45.3 UAH/kg), Poltava (56.7 UAH/kg) and Volyn (61 UAH/kg) regions.

Retail prices for pork also increased significantly last year, the scientist noted. Pork without bone at the end of 2017 cost 113.46 UAH/kg - 46.1% more than in 2016. The price level for pork thighs (meat with bone) increased by 38.3% and amounted to 93 UAH/kg. There is also a significant rise in price of salo. Compared to 2016, the price level for this product grew by 78.9% last year.

In the dynamics of retail prices in May 2018, there is also a decrease. The highest price for pork without bone in May 2018 was in the Luhansk region - 126.59 UAH/kg, the lowest - in Ternopil region - 102.5 UAH/kg. The price for pork with bone ranged from 84.69 UAH/kg (Sumy region) to 104.78 UAH/kg (Kirovohrad region). At the end of last year, salo cost the most expensive - 93.59 UAH/kg - was in the capital, cheaper - 44.99 UAH/kg - in the Ternopil region.

During January-April, 2018, the price of pork with bone and bone-free food markets grew by 1.5-2% in general, that is, at a slower pace than purchasing and wholesale prices. This situation leads to the possibility of laying the price growth in subsequent periods. Although it is significantly limited by the low purchasing power of the population, said Olha Bodnar.

In her opinion, more than several factors caused the rise in price of this kind of meat products in 2017.

This, in particular, reduces the supply of products in the market due to a reduction in the number of livestock due to the outbreak of African swine fever. During 2017, the number of pigs in farms of all categories decreased by 8.2% - to 6.1 million heads. At the same time, the largest losses were suffered by the economy of the population. As a result, the volume of pig production in live weight decreased by 8.4% compared to the indicators of 2016 - up to 531.5 thousand tons.

Negative impact on the price dynamics of the domestic market was also affected by the increase in exports of pig meat. It largely caused a noticeable increase in export prices (+ 32%), the scientist noted. In 2017, Ukraine increased foreign deliveries of chilled and frozen meat of pigs by 1.5 times as against 2016 - up to 4.9 thousand tons.

Growth in the price dynamics for this type of products contributed to the increase in 2017 level of income. If last year the level of average wages increased by 46.1%, then the growth of retail prices for pork was in the range of 38-46%. Thus, the growth of incomes to some extent provoked price growth in food markets, the expert noted.

The impact of these factors will also occur in 2018. In addition, there is an increase in the cost of feed, most of which are grain - their price in the first half of this year increased by 20-25%. This gives reason to expect further growth in prices for pork in 2018, which, according to the estimates of scientists of the Institute of Agrarian Economics, can reach up to 10% by December, predicted Olha Bodnar.