Chinese pork imports begin to show signs

Of the more than 3,9 million tons of pork that Europe exports, about 10 percent comes from the Netherlands. In terms of volume, Dutch exports increased by 21,5 percent last year to more than 431.000 tons. Spanish exports even increased by 62,5 percent to around 746.000 tonnes, meaning that the Spanish pig sector is on a collision course. Germany is still the largest exporter and saw non-European exports increase by 30 percent last year to just over a million tons. In terms of importing countries, China shows an increase of 62 percent to 1,8 million tons. Other years also show a significant import need.

The conclusion for 2016 is that Asian demand is increasingly laying a foundation for the European pig market and therefore also for Dutch pig prices. Of the approximately 1,5 million tons of pork that the Netherlands produces, approximately 30 percent is exported outside Europe, of which the 5 most important sales countries are in Asia. Of these 5 shipments, China requires by far the most volume.

Considering that the Chinese sow herd shrank again by 2016 percent in 3,2, while the entire pig herd recorded a minus of 4,2 percent, it can be expected that the Chinese import requirement for pork, in terms of volume, will remain in full force this year. However, it is difficult to say in advance whether 2017 will be a copy of last year. However, exports can benefit from a logistical improvement. For example, the Chinese have announced that a number of ports have recently been officially approved to import pork. This means that there are now more than 50 Chinese ports that are allowed to import pork.

In terms of pricing, it should be noted that the import prices that China will pay for pork are probably less exuberant than in the first half of last year. In the period between January and June 2016, the Chinese pig price rose from 2,30 euros to 2,85 euros per kilo. As a result, European pork prices also accelerated, because the Chinese were prepared to pay a lot of money for the various meat components. In mid-February, the Chinese pig price was in a negative spiral around a price level of 2,40 euros per kilo.  

The Chinese pork price can be seen as an indicator for the European meat market. When the Chinese pig price took a downward turn in June last year, the European pig market also leveled off. This is because slaughterhouses were then confronted with declining sales prices in China and translated this into pig prices.

The expectation for 2017 is that competition for China will take place between America and Europe remains in full force, where mutual price formation is probably decisive how the proportions will be divided. With current knowledge, Europe can be expected to continue to supply China with pork in 2017. But whether this can be done again at very interesting prices - just like in the spring of 2016 - remains to be seen.