US pork imports to bolster WH Group
by Bryan Salvage
CHINA – China-based pork leader WH Group plans increase pork imports from its recently acquired Smithfield Foods this year, given that US pork prices total around half those in China, according to Reuters. WH Group pledged to grow Smithfield by shipping more US pork to its own consumers in China who are hungry for high-quality pork.
Last year, however, imports were lower than expected after the Porcine Epidemic Diarrhea Virus (PEDv) outbreak in the US increased pig prices, making exports to China not profitable. Strikes at US West Coast ports that began last October have also prevented small shipments of chilled pork exports from the US. As a result, last year total US pork exports to China plummeted 34 percent to 221,223 tonnes.
Live hogs cost around 12 yuan ($2) per kg in China, versus 6 yuan in the United States, said Wan Long, WH Group chairman.
Last week, Smithfield officials said most of its pork goes into its processed products, which were negatively impacted by weaker demand last year. Meanwhile, packaged meat sales volumes increased 0.6 percent in China, with turnover down 0.9 percent to $4 billion versus 2013. Thanks to greater processing efficiency, operating profit increased 4.9 percent.
In other news, WH Group plans to open four plants that process American-style pork products using Smithfield technology, as it looks to increase its branded meat sales. According to plans, the first plant will open later in 2015 in Zhengzhou, capital of Henan province in east-central China. It will initially produce up to 50 tonnes of bacon, ham and sausage per day.