Chinese pig imports will continue to grow explosively in 2020

Rabobank expects Chinese pork imports to set another record this year in 2020. Exporters in the United States in particular benefit from the large meat shortages in China, analysts at the bank expect.

It should come as no surprise that the global pig market is again dominated by African swine fever (ASF) this year. For example, the ASF virus still appears in China, but less frequently than before. The bank signals that the large Chinese pig integrations in particular are increasing production again by keeping extra gilts. This is also evident from figures from the Chinese Ministry of Agriculture. They show that the number of pigs is increasing again.

Despite this, Rabobank expects pork production to decline further this year. And that suggests that Chinese meat imports will set new records. Last year, Chinese imports increased by an estimated 50% to 3,2 million tons. The bank expects imports to increase by another 1 million tons this year to 4,25 million tons.

High prices invite growth
As was the case last year, China is largely dependent on the European Union, the United States and, to a lesser extent, Brazil in terms of imports. Rabobank expects pig production in these areas to increase. A slight growth of approximately 1% is expected in the EU. After a slight contraction in 2019, good export opportunities and high pig prices are inviting pig farmers to increase production.

In the US, pig farmers are giving even more gas. Rabobank expects production growth of more than 3%, after production already increased by 5% last year. The rapid increase means that the processing capacity is reaching its limits. This may cause problems, Rabobank warns.

US benefits from trade deal
Because of the trade deal with China (phase 1), the US can export larger volumes of pork this year. The bank expects US sales to grow by 300.000 tons. In the first 11 months of 2018, sales in China amounted to 472.000 tons. Brazil saw pork exports to China increase by 59% to 249.000 tons. A further increase is expected for this year, exact numbers are not mentioned. Brazilian pig production is also likely to increase.

Wouter Job

Wouter Baan is editor-in-chief of Boerenbusiness. He also focuses on dairy, pig and meat markets. He also follows (business) developments within agribusiness and interviews CEOs and policymakers.

w.baan@boerenbusiness. Nl

© DCA Market Intelligence. This market information is subject to copyright. It is not permitted to reproduce, distribute, disseminate or make the content available to third parties for compensation, in any form, without the express written permission of DCA Market Intelligence.