China’s pork market is the centre of intense interest in the global meat industry – and little wonder. Pork prices soared at the start of 2016, reaching a record high of $2.99 (RMB20) per kilogram, but a combination of farmer losses and government shutdowns has led to a destocking over the last two years, resulting in a lack of domestic pork and meaning imports are likely to rise.
Rabobank’s analysis on China’s pork market predicted imports were set to rise to over 2m tonnes of pig meat this year – and similar record-setting levels are expected in the years to come.
“China plays an increasingly important role in the global pork market,” said Chenjun Pan, senior animal protein analyst at Rabobank.
“China needs to increase imports to cover the supply gap in 2016. In total, we expect China to increase pork imports by 30%. The EU, the US and Canada are well-positioned to increase exports to China, given their availability of product and the adoption of production systems in response to China’s ractopamine-free policy.”
Domestic production in China is expected to drop by 5% in 2016, although Rabobank analysts expected this would recover in 2017 thanks to a “rapid replenishment” that took place in February 2016. However, consumption is expected to fall by 4% as China’s economy cools and prices rise.
This has left a supply gap for foreign nations to fight it out for the lion’s share of the increased shipments of pork to China, predicted Rabobank.
Leading pork processors and packers are already repositioning themselves to swoop in on China and strike up lucrative trade opportunities by adjusting production systems and capitalising on currency changes.
This means competition in China is going to heat up as international pork production expands. Rabobank claimed exporters would need to improve production and invest heavily in order to secure future access to the Chinese market.