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All news / NSS: It`s early to predict consolidation of the pig sector

  • 16 Apr 2019, 10:47

In the next three - five years, the consolidation will begin in the pig sector. As a result, the top three companies will hold half of the market. This forecast was given by Yuri Kovalev, Director General of the National Union of Pig Producers (NSS), at the Russian Meat & Feed Industry conference. Despite the fact that the share of the top 20 players in the sector is increasing and in 2018 it reached 65% of the industrial production of pork, it’s premature to talk about market concentration, Kovalev said. He defined the current stage as the organic growth of domestic pig production. According to him, the start of consolidation, which will begin in the foreseeable future, will be caused by two reasons. The first is the rather difficult financial situation of producers, due to changes in market conditions. The second is the age of the founders of most pig breeding companies. “The time has passed, 15 years from the moment companies started their activities, and someone had followers, and someone didn’t have them,” shared the observations Yuri Kovalev. Consolidation will be considered valid when the share of the top three producers comes close to 50% of the market, as is the case throughout the world and in various industries. A significant increase in the supply of pork, which we are seeing now, will inevitably affect the price of this type of agricultural product, the head of the NSS believes. It is likely to fall by 5-10% and become the lowest in the last five years.

 

Source: Meatinfo