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China’s pork demand could make corn imports soar
Story Date: 10/1/2012
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Source: Tom Johnston, MEATINGPLACE, 9/28/12
China’s demand for pork could prompt that country’s need for as much as 20 million metric tons of corn per year within a five-year time frame, according to a new report by Rabobank.
The report, titled “The Industrialization of China’s Pork Supply Chain” says China’s changing pork industry “will have major reverberations on world markets.”
But whether China will need to import so much corn will depend on how well and how quickly the country can industrialize its pork sector, including improving corn yields and swine feed conversion ratios to match U.S. levels. “If China does not have to import pork, it would need to import corn, and if current trends in China’s pork production and industrialization continue, corn imports would rise significantly,” Rabobank says.
China has been importing more than 0.4 million metric tons per year, in a world market with trade of less than 7 million metric tons per year. Rabobank predicts China will continue to be an importer of pork and corn, but how much will depend on improvements in a domestic supply chain that is still transitioning from household farming to modern commercial systems.
China’s ability to attain self-sufficiency in pork is helped by its great potential for improvement in hog productivity and a strong consumer appetite for fresh meat. The country also lacks a comparative advantage in land intensive agriculture (for example, for growing corn), which means it should import corn rather than produce it and focus on pork production.
Impediments to China’s self-sufficiency include continued disease problems, food safety issues, logistics and lack of a cold chain, Rabobank says.
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