According to the company’s announcement, the final payment for pig and sow suppliers will be 50 øre per kilogram, down from the previously expected 70 øre. In contrast, cattle suppliers will see an increased payment of 110 øre per kilogram, driven by higher-than-expected beef prices toward the end of the fiscal year.
Danish Crown’s Group CEO Niels Ulrich Duedahl explained that the tariff hike by China came too late in the financial year for the company to offset the losses.
“We are disappointed that we cannot deliver the promised 70 øre, but the increase in tariffs on pork exports to China came so late that it directly impacted our financial results. We decided to inform our owners now to remain as transparent as possible,” said Duedahl.
China raised its import duties on EU pork at the beginning of September, which led to a 50 øre price reduction effective from September 12. With only about two weeks remaining in the fiscal year, all existing inventories and shipments already en route to China were also subject to the new tariffs. The company tried to mitigate the financial impact, but passing on the additional costs to Chinese customers proved nearly impossible.
“We always strive to return as much profit as possible to our owners, even if that makes us more vulnerable to market fluctuations. Unfortunately, this time we have to acknowledge the loss,” Duedahl added.
Unlike the pig sector, beef producers will receive higher-than-expected payments, driven by the rise in beef prices in the final weeks of the financial year, which boosted revenues for that division of the company.
Thus, Danish Crown’s financial year ends with mixed results — negative for pork exporters but positive for cattle producers.
PigUA.info based on materials from euromeatnews.com