Банкеръ Weekly

Briefs

MEAT SUPPLY GOES DOWN, PRICES WILL GROW FURTHER

Traditionally, pork consumption falls during summer months. Although this is the time when its price is lowest, things went different this summer. According to the statistics, wholesale and retail prices did not change in September, even though demand was low. In the last week of the month, the average retail price of a kilogram of ham was BGN6.90. However, in some regions of the country it reached BGN7.50-BGN7.90. Traders comment that it will be no surprise if prices start going up in October because consumption will increase. The retail price of the most frequently supplied meat on the Bulgarian market will probably reach BGN8.00-BGN8.80 per kilogram. Besides, there is a traditional 20 to 30% increase around Christmas. Pork was not sold below BGN6.00 on the market in September. A few consignments of lower quality were offered at BGN5.80 on the markets in Veliko Tarnovo and Pernik. The highest price was registered in the period September 27 - October 3 (BGN7.90 in Lovech and Haskovo and BGN7.80 in Sofia).In the next two years until Bulgaria joins the European Union (EU), the pig-breeding branch will face many serious changes, experts comment. First of all, the new hygienic requirements and food safety standards of the EU must be introduced and they require huge investments. The biggest amounts will be spent on acquisition of new animal breeds that do not need anti-plague vaccination and are suitable to breed in local conditions. In fact, this vaccine has been a long-time obstacle for the sale of Bulgarian pork on the European markets.But even if the problem with the vaccination is overcome, the country will remain unable to export because of the high price of its pork. At present, the average price of a kilogram on the local market is BGN6.90, while in the EU countries it is worth EUR1.40 to EUR1.80. Market-oriented companies will have to apply new marketing strategies in order to survive in the terms of strong competition from pork producers in the EU. And even if money is found for modernisation of the branch, the production will shrink considerably, experts say. According to unofficial information, at least 30 to 45% of the farmers occupied with pig-breeding will go bankrupt. There are indicators for this trend: female animals are getting fewer and that will have a negative effect in a long-term period. In turn, experts from the agricultural ministry recommend that import of live sheep be increased and the number of pigs reduced.A special report by the US Ministry of Agriculture issued in late September made a similar forecast on the future of pig-breeding in Bulgaria. American experts predict that the number of cows will increase in the next two years, because the situation in the milk-processing industry is slightly better. The US ministry expects one more thing that we already know - that the import of pork in Bulgaria will grow. But they justify their forecast with the willingness of Bulgarian producers to restore at least partially the number of animals they bred in 2000-2001. Because of the expensive fodder and low purchase price, a significant part of the Bulgarian stock-breeders were forced to close their farms after 2002.According to the US analysts, pig-breeding is threatened most as it has to be restructured in accordance with the EU standards, i.e. each farm with capacity to breed 1,000 pigs should invest EUR2MN.Right now the rescue of the branch lies in the continuing commercialisation. In pig-breeding it is much higher than in other sectors, because market-oriented pig farms already possess 40% of the live-stock. This makes it reasonable to predict that the number and the share of large farms will go up at the expense of small family breeders that are not market-oriented. Therefore, small and medium-sized pig-breeders in Bulgaria will either go bankrupt in a year or two or breed a few pigs for their own consumption.

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