China's pork demand to impact corn imports
September 26, 2012
by Meat&Poultry Staff
NEW YORK – China’s corn imports could reach 20 million tonnes per year within a five-year period as the country’s pork production and pace of industrialization increases, according to a report by Rabobank’s Food & Agribusiness Research and Advisory Group.
China’s impact on corn markets largely depends on the country’s goals. If China improves its corn yields and feed conversion ratios, the country could achieve self-sufficiency. However, if China doesn’t import pork, it would need to import corn causing a significant increase in imports of the commodity, according to the report "The Industrialization of China's Pork Supply Chain”.
China imports more than .4 million tonnes of pork annually in a global market with trade of less than 7 million tonnes, according to Rabobank. China will continue to import pork in the near term as the country transitions from a traditional household farm supply chain model to a modern commercial system of pork production. Coordination between farms and processing plants remains undeveloped, according to Rabobank, and the pork supply chain remains based on the spot market in most cases.
"China's chances for self-sufficiency in pork are boosted by its great potential for improvement in hog productivity and a strong consumer preference for fresh meat," Rabobank said. "It also has a lack of comparative advantage in land intensive agriculture (e.g., for growing corn), so it should import this type of commodity rather than producing it, and focus on areas such as pork production.
"However, challenges in achieving success in pork production include the continuation of disease problems, food safety issues, logistics, and the lack of a cold chain."