Fall in value of sterling and loss of livestock in Chinese floods fuel export boom – and dearer bacon in UK

This article is more than 4 years old

This article is more than 4 years old

Brexit is pushing up the price of a bacon butty as China exploits the weak pound to hoover up British pork amid its own domestic shortage.

China’s farming industry has been devastated by severe flooding, which has forced suppliers to look further afield for their pork.

The added demand from China has pushed up EU pork exports to the People’s Republic by 60%, to reach 1.2m tonnes in the first six months of the year.

Much of China’s appetite has been sated by British meat exports, which have become cheaper for foreign buyers thanks to the weakness of sterling following the Brexit vote.

The result has been a 40,000-tonne rise in pig meat exports, up 31% on the first half of last year.

Some shop suppliers have raised their prices by up to 38%, according to purchasing company Beacon, causing price increases at the till of up to 19%, as supermarkets pass the cost on to consumers. It added that high prices would persist.

Pigs, Brexit and China: what’s the future for Britain’s farmers? Read more

“The combination of such huge demand for British pork from China and the devaluing of sterling following Brexit is impacting our breakfast tables,” said Emma Warrington, a senior food buyer at Beacon.

“Figures from our butchery suppliers show the price of British bacon rising, in some cases substantially, with data from [butcher] Birtwistles showing that the spike in demand was equal to an additional 30,000 tonnes in the first six months of 2016.

“All of this means we might be paying a higher price for a bacon sandwich for the foreseeable future.”

China’s paucity of pigs has been caused by severe floods, which have affected millions of people and left pig farmers struggling to protect their livestock.

The European farming industry has also felt the effect of flooding, which Beacon warned could pile on the misery for anyone who likes chips with their bacon butty.

It said the floods had affected potato crop quality and quantity, which is set to drive up prices for chips and other potato products.



Britain’s vote to leave the European Union – and the subsequent drop in the value of sterling – has triggered a string of warning about the cost of goods, including supermarket produce, holidays and bottles of wine.



The Consumer Prince Index measure of inflation reached 0.6% in July, the highest level in 20 months, with many economists saying the effect on inflation has yet to be felt in full.

Some industries such as domestic tourism are reporting benefits as the weak pound makes the UK a more attractive place for foreign visitors. Swiss luxury watch firms have reported a boom in tourists buying timepieces in the UK.

The most recent health-check on the state of the UK’s manufacturing sector also lent some weight to claims that the weakness of the pound will prove a boon to exporters.

Manufacturing exports rose to their highest level in two years in the three months to the end of July, according to quarterly survey data from the Confederation of British Industry.

But economists have warned not to read too much into one export figure. The CBI said it was not all good news for UK firms that do business with overseas clients.

The business lobby group said the currency effect was a “double-edged sword”, with manufacturers likely to feel the pinch as the cost of imported materials rises.