When pigs fall

by MEAT+POULTRY Staff
Share This:
Search for similar articles by keyword: [Rabobank], [China], [Pork]
Rabobank reports opportunities in China for pork exporters.
Rabobank is forecasting a 600,000 tonne increase in China's imports of pork.

NEW YORK – In the race to supply pork to China, which leads the world in pork consumption, the United States, the European Union and Canada are sharing the pole position. China’s plunging pork production presents an opportunity for exporters to fill the void, according to Rabobank’s latest report “China’s Incredible Shrinking Hog Herd.”

China’s pork industry has experienced one of the largest hog and sow culls in its history – pork production in the country is expected to drop 6.5 percent to 53 million tonnes. This represents nearly 100 million head of China’s hog herd and 10 million head of breeding sows, or the equivalent of the US, Canadian and Mexican pork industries disappearing in less than two years.

Rabobank found that a 1.9 million tonne supply gap in China could mean a 600,000 tonne increase of pork and variety meat imports above the 1.3 million tonnes the country imported in 2014. Along with plummeting production, Rabobank expects pork consumption to decline in China by approximately 1.3 million tonnes as Chinese consumers switch to lower-priced poultry or other proteins such as beef, sheepmeat and seafood.

Still, Rabobank expects pork imports to jump by 1.9 million tonnes in 2015, or 45 percent above year-ago levels. The US , Canada and the EU are in the best position to fill China’s gap in domestic pork supplies.

“For 2015, Rabobank expects China's pork production to decline by 6.5 percent, the third-largest decline in production in the last 40 years. This will be supported by a 600,000 tonne increase in imports – primarily from the EU, the US and Canada — in the second half of 2015,” William Sawyer, Rabobank animal protein analyst, said.

“This surge in pork trade could not come at a better time, as the global pork sector is in the midst of a supply glut after many regions have recovered from the porcine epidemic diarrhea virus outbreak of 2014, and a number of trade bans have depressed pork prices and producer margins.”

Other factors creating tailwinds include Russia’s ban on Western food imports, which has left a glut of ractopamine-free pork in the US, EU and Canada. A stronger US dollar has made EU and Canadian pork more competitive in the global market, Rabobank said in its report. Rabobank expects Canada to increase exports of pork to China by roughly 50,000 tonnes in 2015.

“The currency issue is a major headwind for US pork exports, as, over the last year, the US dollar has strengthened 20 percent to 25 percent against the euro and Canadian dollar, challenging US export competitiveness,” Rabobank reported. “This issue has been largely alleviated by the significant increase in US pork supply in the aftermath of PEDv in 2014, bringing US pork prices 40 percent to 50 percent below 2014 levels. Taking the variables of currency and domestic price, US pork remains very competitive in the global market against offerings from Europe and China.”

Comment on this Article
We welcome your thoughtful comments. Please comply with our Community rules.

 

 


The views expressed in the comments section of Meat and Poultry News do not reflect those of Meat and Poultry News or its parent company, Sosland Publishing Co., Kansas City, Mo. Concern regarding a specific comment may be registered with the Editor by clicking the Report Abuse link.