Inside Pigs
USDA: 'China will import significantly more pork'
The United States Department of Agriculture (USDA) expects China to import significantly more pork in 2019 and 2020. In addition, the Flemish Producers Organization for Pig Farming (VPOV) concludes that the impact of the outbreaks of African swine fever on price formation in Europe can hardly be overestimated.
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A new report from the USDA shows that the US department expects China to import approximately 2019% more pork in 60 (up to 2,5 million tons). For 2020, it then expects the country to import an additional 40% (up to 3,5 million tons). The rising import figures are mainly based on the fact that the country a large part of the pig herd will lose, as a result of the outbreaks of African swine fever.
According to the Ministry of Agriculture, the number of slaughters in 2019 will decrease by 13%, although pork production will decrease by 'only' 11%. This is a result of the high slaughter weights in the country. All in all, this means that production will decrease by 2019 million tons in 6. For 2020, the ministry expects production to decline by 8% (3,8 million tons). In short: over 2 years, Chinese production has decreased by almost 10 million tons. That is comparable to the production of Germany and Spain combined.
Records broken
The US Department of Agriculture currently estimates frozen pork stocks at 3 million to 5 million tons, which is a record level. According to the authors, this has 2 causes. First of all, cheaper American pork has been placed in the cold stores in anticipation of the agreement between the United States and China. Secondly, the import of more expensive pork (including from the European Union) has been kept in the hope of rising prices.
Over the past few weeks, the increase in the Chinese pig price has been slightly less strong than in previous weeks, but is still at a record level: 21,55 yuan per kilo (€2,72 per kilo). The slight stabilization is caused by the large stock. However, the Ministry of Agriculture expects that the price may rise sharply again in the coming months, due to uncertainty about production figures and a decrease in stocks.
Opportunities for Europe
The VPOV says that China will mainly focus on Europe for the import of pork. This is because the European Union is the 1st largest producer of pork and the largest exporter. Europe is currently already supplying about 50% of the total import requirement from China. In the first 4 months of 2019, pork exports to China already increased by 37%. Of all major European exporters, the largest percentage gain was even achieved The Netherlands.