America foresees an increase in pork imports from China

The fluctuations in the Chinese pig population lead to a lot of varying insights about the real developments in the country. For the full year 2022, the USDA now assumes a 5% reduction in pig herd. However, production is shrinking much faster. The ministry assumes a 14% reduction in pork production.

The causes of the anticipated contraction are diverse. According to the USDA, many pig farmers have been slaughtered this year due to low pig prices and fears of new infections with African swine fever. This, at a time of seasonally weak demand, caused prices to fall sharply. The fact that production is falling faster than the number of pigs is related to the fact that many heavy pigs were slaughtered earlier this year.

After 2 years of growth, a big step back
The USDA expects a total pig population of 2022 pigs by early 375.660.000. That is more than 31.000.000 fewer than at the beginning of this year. Because of this shrinkage of the pig population, pig production will shrink by 5%, according to the institute. A factor that also plays a role in the decline in the pig population is the policy of the Chinese government. The latter has recently indicated that it is committed to stable production and pricing for pork. This leads to lower expectations for investors in terms of returns and fewer expansion plans.

Walk 2022 growth again
Although the USDA forecasts a growing pig population again in the course of 2022, and with it higher end numbers of animals, the growth depends on the price policy by the Chinese government. Decisive will be to what extent the government will curb rising prices in the country. Growth will mainly come from the larger companies. They would have been able to better manage the periods with lower margins and also benefit from subsidies from the Chinese government that were introduced to absorb losses in the year 2021.

Imports are rising again
Pork imports by China will increase again as a result of declining domestic production. Although pork consumption will fall, this is mainly due to the tighter availability of the product. All in all, China will start importing more pork next year, the USDA said. It expects an import volume of 5,1 million tons for the whole of 2022. That is 350.000 tons more than in 2021 and almost as much as in the record year 2020 (5,28 million tons). Although the government's price control mechanisms can limit price increases and thus imports, the amount of meat ultimately demanded by the Chinese consumer will result in a larger import volume.