RIGA - Since introducing protectionist measures in July, pork prices have risen
significantly, causing meat processors to cut back out purchases of raw
material. Both pork breeders and meat processors believe that easing the
protectionist measures would be the best solution.
The Latvian meat processing company association chairman Maris Cers said
that the purchasing price for pork has currently risen to 0.77 lats (1.2
euros) per kilogram.
Before the market protection measures were introduced in July, the average
purchase price for pork was between 0.5 and 0.6 lats per kilogram, which
pork breeders claim did not cover production costs.
As a result, meat processing companies are buying less meat and seeing their
first operating losses.
And just as they predicted, meat processors are suffering from a deficit of
meat since Latvian pork breeders cannot provide them with enough raw
material.
Additional problems are expected later this year due to the poor grain
harvest, as pork breeders may not be able to boost their pork stock due to a
lack of feed, said Cers.
He also said that the import of subsidized pork has basically stopped in the
past months, therefore it should not be expected that the price of pork will
radically fall after the measures are lifted.
Cers added that Latvian pork breeders should not be afraid of subsidized
pork imports, since once the country joins the EU next year such imports
will no longer enjoy state protection.
The Latvian Pork Breeders Association chairman Varis Simanis said that the
quotas for pork and pork sub-product imports may be raised, but the
additional import tariffs on live pigs should not be dropped. Simanis
admitted that although the pig herds in Latvia have increased in recent
years, producers are still unable to supply the local market with enough
pork.
He said that since the market protection measures were implemented the price
for domestic pork has surged and the protection measures are thus no longer
working, as meat processing companies have cut purchasing amounts.
Simanis said that pork breeders should "feel a limit" where they would cease
raising prices.
On October 4 Latvia is scheduled to submit a reply to Lithuania and Estonia
on the suggestion of reviewing its pork market protection measures and
boosting the import quotas for the two countries.
The Agriculture Ministry's strategic department director Rigonda Lerhe said
that the ministry is still making calculations but said that the situation
in the sector has stabilized, the amount of pork imports has fallen by 70
percent and the purchasing price for local pork has increased.
