Bacon: Turmoil brings contracts plea

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Confusion continued in the bacon market as The Grocer went to press, despite the semblance of normality returning to the production and distribution system as fuel supplies resumed. Malton, the biggest UK pigmeat processor, was almost back to a full slaughter rate on Tuesday after announcing at the beginning of the crisis it would halve its kill. Reports from importers were of buyers muddling through, having been helped by lorries coming in from the continent with full tanks. However, price volatility caused by the supply disruption provoked complaints of flaws in the market structure. "Prices are impossible to predict even a day ahead," grumbled one of the leading suppliers of imported product, who claimed it demonstrated the need for a system based on wider use of forward or fixed price contracts. He said the fuel crisis was the latest example of external influences imposing unnecessary pressure on the market through the spot pricing mechanism, distracting attention from demand-boosting tasks. Yet it is possible to detect fears of a change in the supply trend rather than mere concern about price volatility. Specifically, will the UK market come under strain from increasing Danish tonnage? First half figures show the Dutch pushing up shipments of pork and bacon sharply, while heavier supplies of pork from Denmark were partly offset by a downturn in bacon tonnage. Bacon and ham produced in Great Britain Latest estimates from MAFF show the downturn in UK bacon and ham production remains less sharp than the fall in pig slaughtering. Factory output between January and August ws down 10% from a year earlier, against the 12% drop in clean pig kill. {{PROVISIONS }}

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