Despite a significant decline in pork exports to China, a possible export stop to the country could have serious consequences for the sector. If exports come to a standstill, it remains a matter of guessing where the European sector will sell its residual parts.
China has taken the next step in the recent trade war with the European Union. Now that Europe wants to impose a tariff of 38,1% on Chinese electric cars, China is threatening European ones agricultural products to keep out. The country started an investigation into dumping from European silk weeks ago. China has now taken the next step. Chinese state media reported that Chinese companies have asked the government to initiate an anti-dumping protocol.
At first glance, that doesn't seem like much of a problem. Chinese pork exports are on the low side and due to high European pork prices, this does not seem to be changing for the time being. Between August 2019 and June 2021, exports were significant. Due to an outbreak of African swine fever (ASF), exports rose to well over 150.000 tonnes during this period. Exports then fell back to pre-outbreak levels, but since the war in Ukraine, exports have fallen even more sharply. Since April 2023, exports have been structurally below 100.000 tonnes in all but one month. Before the war, such an export figure was exceptional.
Organ meat remains constant
There is little to lose when it comes to pork. If you zoom in a little more, it becomes clear that the import of frozen meat in particular has fallen sharply in recent years. At the time of the swine fever, approximately between 90.000 and 200.000 tons of frozen meat were exported to China. Before and after that period, exports were usually around 50.000 tons. Since the war in Ukraine, exports of frozen pork have fallen to between 30.000 and 50.000 tons.
However, this is offset by a very constant flow of organ meat. This export flow is around 50.000 tons per month and has hardly been affected by the war in Ukraine. During the swine fever outbreak, exports of offal increased to approximately between 57.000 and 87.000 tons per month.
Square value
It is precisely this loss of slaughterhouse waste that poses a significant risk to the European market. The pork sector can still reasonably cope with the drop in demand for meat by lowering prices slightly and looking for other sales markets. This is a lot more difficult for organ meat, as there is simply less demand for it worldwide. This threatens to collapse the model of square valorization. This is a major blow for the European sector. Since 2019, China has imported between $1,2 billion and $1,4 billion worth of European organ meat.
If European slaughterhouses cannot get rid of their offal, there is only one solution and that is to increase prices on the home markets. However, herein lies the risk of loss of demand, while pork consumption is already under pressure in most European countries.