Source: Rita Jane Gabbett, MEATINGPLACE, 12/14/15


Predictions earlier this year of a large increase in China’s pork imports have not come to pass, according to data assembled by the U.K.-based Whole Hog Brief.

According to Whole Hog Brief editor and analyst John Strak, an August forecast by Rabobank that China’s pork imports could increase by 600,000 metric tons this year to make up for a production shortfall has occurred, based on China’s pork imports in the first 10 months of the year.

In August, Rabobank expected China's pork production to decline by 6.5 percent, the third-largest decline in production in the last 40 years. According to the Rabobank report, a 1.9 million-metric-ton Chinese supply gap implies a 600,000-ton increase of pork and variety meat imports above the 1.3 million metric tons imported in 2014.

At the 10-month mark, however, total pork imports into China were 1.24 million metric tons, making it unlikely imports will hit the August projection. Recently, Rabobank informed Whole Hog’s Editor that the original forecast was no longer supported internally and that the new Rabobank prediction was a hike of 200,000 metric tons in Chinese imports for 2015.

Hog prices in China are higher than the same time as last year, but the rate of growth continues to slow, according to Whole Hog Brief. Either the supply contraction was not as large as the official Chinese livestock census was indicating or consumer demand has fallen back or there has been a lot of smuggling – or a combination of all these factors, the publication speculated.
As for demand, there is no shortage of non-official data that provide evidence of a squeeze on disposable incomes: Factory output is down, gambling receipts are collapsing in Macau, sales of luxury goods and Western brand names are down across the board, and there are weekly news items describing the crackdown on corruption. Chinese consumers are feeling the pinch – or are fearful of one.

The latest available trade data describe Chinese pork imports for the first 10 months of 2015 showing a 9-percent increase from 2014. The EU’s trade with China (which accounts for about 70 percent of the Chinese import trade in 2015, continue to show gains of around 33 percent in the January-October period. EU exporters made the big gains in this market in 2015.

Although total year-over-year sales are up by nearly 40 percent in the month of October, Whole Hog’s calculation is that 2015 imports are unlikely to be more than 1.6 million metric tons in total in the full year, up about 15 percent increase from 2014.
Separately, as part of the new five-year plan the Chinese Ministry of Agriculture has announced that pig production needs greater environmental control in southern China. In recent years, since the density of pigs there has increased pressure on water use and waste control. A better balance of unit locations in the landscape and scientific management — especially waste control — is necessary, according to the MoA. The Ministry has announced that it expects that pig units with more than 500 animals will account for more than 70 percent of all herds in southern China in 2020.

Future development regions for the pig industry are AnHui and north of Jiangsu Province. The future direction of pig production will emphasize ecology/the environment and encourage combined crop and livestock systems to mitigate waste control problems.

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