Inside: Pigs & Feed
ISN full of expectations about Chinese import needs
In recent years, Chinese production has contracted sharply. This trend is expected to continue. The tightened environmental policy of the Chinese government controls production, but also indirectly puts a brake on consumption. How is the pig sector in China developing and will the unprecedented import urge for European pork remain in force?
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In 2013, the sow herd was still just over 50 million animals. In the years that followed, things got messy and the counter continued to decline. This year too, the number is said to decrease by more than 10 percent to approximately 38 million sows. At least, that is what the USDA (the United States Department of Agriculture) expects.
The shrinkage can be seen as a direct result of the tightened government policy in the field of the environment. Fewer sows naturally also means fewer piglets and, by extension, less pork. Chinese production is expected to reach a maximum of 51 million tons. That is slightly below last year's level.
Scarcity in China
It is no secret that the Chinese have become more dependent on imported pork since 2016. Despite the fact that Chinese supermarkets are now filled with, mainly, European and American pork, there remains a shortage in China. As a result, pork is priced more expensively. Consumption has therefore fallen by 5 percent this year to 52 million tons. This somewhat skeptical expectation is contained in a German market report. Other reports do assume growth.
According to the ISN (the representative body for German pig farmers), Chinese import needs will remain high this year, regardless of declining consumption figures. Chinese pig farmers, who want to grow, are hampered on all sides by environmental regulations. As a result, there remains scarcity. In addition, prosperity in China is still increasing, the ISN qualifies the report. All in all, the European pig sector can count on a repeat of 2016 volumes.
January exports surpass 2016
Moreover, the European pig sector can refute excellent export figures for January. Sales to the three largest customers in Asia: China, Japan and South Korea, increased by more than 3 percent compared to last year.
Sales to China experienced a volume growth of 34,7 percent to more than 157 tons. South Korea was also strong in the market, with an increase of 64,5 percent to 24.000 tons of pork. Bellies are especially popular in Korea.
Japan also imported an additional 3.000 tons to more than 30.000 tons. The figures deserve some nuance, because Chinese demand only increased sharply in the second quarter of 2016. In total, European exports increased by 50.000 tonnes in January to just over 300.000 tonnes of pork.