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China’s pork imports boom, but EU share slumps

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Oscar Rousseau

By Oscar Rousseau+

04-Nov-2016
Last updated on 04-Nov-2016 at 13:10 GMT2016-11-04T13:10:47Z

Brazilian pork continues to win ground in the high-value Chinese pig meat market
Brazilian pork continues to win ground in the high-value Chinese pig meat market

China’s pork imports continue to gather pace despite the European Union’s (EU) market share falling in the world’s most coveted pig meat arena.

Imports of pork from the world’s second-largest economy, China, increased by an astounding 160% in the third quarter of 2016, compared to the same period a year ago. The highly elevated intake of pork comes as China’s roaring economy cools to single-digit growth and pork producers in Europe twitch over concerns that the country’s market share may continue to decline.

The EU is overwhelmingly the main importer of fresh and frozen pork to China. It accounts for 68% of all pig meat imports by China, but the share is 5% lower than it was during the first nine months of 2015, according to UK levy board Agriculture & Horticulture Development Board (AHDB).

Thanks to the relatively weak euro, EU pork exports to China have been competitive and the widespread use of growth-enhancing drugs, mainly in the US, has given the EU a clear unique selling point.

Balance of power shifting

"However, the balance is now starting to shift,” said Stephen Howarth, market intelligence manager, AHDB.

This began with Brazil gaining market access, which has allowed them to take a share away from the EU. Now, US hog prices (and hence those from Canada) have fallen sharply and are well below those in the EU for the first time in around three years. Hormone-free production is also increasing, so both the US and Canada are likely to increase exports to China from now on. This may also take market share from the EU.

Overall, therefore, the Chinese market is likely to be tougher for the EU next year than it has been in 2016... I’d still expect the EU to be the leading supplier but its market share will almost certainly be lower”.

Germany the growth-driver

From January to September, China imported 873,000 tonnes (t) of pork from the EU. Germany holds the leading export position here, with volumes up by 91% year-on-year. Spain, one of Europe’s fastest-growing pork exporters , and Denmark were also key players, both more than doubling shipments.

Despite the positives for the EU’s key exporters to China, the non-EU imports grew ahead of Eurozone nations, with the US, Canada and Brazil performing exceptionally well.

Canada almost quadrupled its share to China, thanks to the fact its pig herd is largely free of growth-enhancing drugs like ractopamine, outlawed by China’s Communist Party government.

After more Brazilian meat plants won export permits to China, trade has increased by 5% during the same period.

China’s overall pork import growth of 160% has been driven by its low domestic protection supplies, following environmental barriers put up by the government to tackle China’s pollution problem.

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