February 2, 2005

Hong Kong mules over re-importing US beef; pork exports up

Since December 24, 2003, U.S. beef exports to Hong Kong have been banned.  Renewed momentum to seek a reopening of such traditional markets has pushed the USDA to actively engaged in negotiating with the Hong Kong government as to when and how to re-open Hong Kong¡¯s market. 

The Hong Kong government still has some remaining concerns over the BSE surveillance and monitoring measures currently in place in the United States and has requested for a BEV program catered for U.S. beef exports to Hong Kong.  It is estimated that U.S. exporters have lost $95 million business to Hong Kong in the past 14 months. 

Effective November 30, 2004, Hong Kong lifted the ban on Canadian beef.  Boneless beef derived from cattle under 30 months of age with Specified Risk Materials (SRM) removed is allowed entry into Hong Kong.  Only five Canadian firms are eligible to export products to Hong Kong. 

Hong Kong consumers have shown little or no concern regarding the BSE cases.  The announcement of the two additional BSE cases in Canada shortly after the ban was lifted hardly served to raise public concern.  The territory's stable beef consumption in 2004 is expected to continue into 2005. 

Pork consumption in 2004 increased 7.6 percent as Hong Kong banned chicken products from China and the United States in the early part of 2004, pushing up pork consumption. 

The Hong Kong government has since limited the supply of imported live chickens to 30,000 daily, half of normal levels.  With good prospects in the catering industry and bourgeoning tourism, pork consumption in 2005 is expected to maintain 2004 levels at 480,000 tons.

U.S. pork exports to Hong Kong reached a record in 2004.  Between January to November 2004, Hong Kong imported 7,097 tons of pork, at a value of $14 million. This is an increase of 58 percent compared to the same period in 2003.  A weak U.S. currency also increases the price competitiveness of U.S. products compared to European ones.

Chilled pork from China may start to enter the Hong Kong market in the first quarter of 2005, giving rise to possible direct competition with freshly slaughtered pork. Once Hong Kong starts importing chilled pork from China, production of freshly slaughtered pork in Hong Kong is expected to slide over the years because of unfavourable price differences between the two types of pork. 

Effective November 1, 2004, all meat re-exports to China through Hong Kong are subjected to the compulsory pre-inspection required by China Inspection Co. in Hong Kong, a measure that translates to an additional cost of approximately HK$4,000 a container (inclusive of transport and pre-inspection fees). 

This additional cost may drive more direct shipments from the U.S. to China, rather re-routing to Hong Kong for re-exports.