AGRIndex: Divergence Within the Meat Market

AGRIndex: Divergence Within the Meat Market

The FINANCIAL -- In April 2018, MEAT prices increased for the second consecutive month, and the m/m gain in prices (+1.8%) reached their highest value since April 2017.

Nonetheless, the y/y gain in MEAT prices continued to shrink in the last month and dropped to a 14-month low of +4.7% in April.

On the product level, all types of meat except pork (-1.1%) gained in price in April 2017, but the speed and direction of the price changes were not uniform. Fresh beef prices have been increasing steadily for the last 12 months, and gained +5.6% in total, while chicken meat prices have been falling marginally in 2018, and the total difference in prices between April 2017 and last month was just +1.0%. In contrast, the gain in mutton prices has been speeding up in recent months, and the year-to-year change in April 2018, compared to the corresponding month of 2018, rose to +6.8%.

As far as possible determinants of price-changes are concerned, on the supply side, according to GeoStat’s preliminary data, meat production in Georgia was boosted by 9.5% in Q1 of 2018, compared to Q1 of 2017. Additionally, the number of bovine animals went down by 51,600 head in the same period of time, while the trade balance decreased by only 18,700 head. In case of pigs, the total number increased by 16,400 head (+10.2%) during the last four quarters, and the trade balance decreased by 1,600 head, leading to a marginal but logical decline in pork prices. The 2.4% increase in the number of poultry started to affect the chicken meat market only recently. As for the demand side, meat consumption increased because of two main facts: the Easter fast finished at the beginning of April, and tourist inflow increased.