MLBA7: February / March 2009
Must we rely on the West? Asia struggles to maintain its self-sufficiency in meat
Other Asian nations have pulled off similar tricks, managing to remain net exporters of meat even as demand grew. However, those decades when meat and seafood output grew at a healthy, galloping pace are now over. As the accompanying graphs demonstrate, since the year 2000, meat production has begun to top out, increasing at a nominal rate that fails to keep up with population growth. Consequently, Asia's meat exports have been declining and some countries are about to become importers of key meat lines. This is particularly true in the more prosperous or faster growing parts of northern Asia such as China, Japan or Korea.
Granted, not all the decline in net Asian meat exports is due to demand growth. In the case of poultry, supply was constrained after 2004 when bird flu greatly curtailed Thai poultry production. Here however, the damage is done, as Brazilian frozen chicken has carved out a seemingly permanent niche in lieu of banned Thai exports.
According to Thomas Lee Bauer, Head of Food & Agribusiness Research and Advisory Asia for Rabobank International, "large frozen chicken exports out of Thailand will probably not happen again. What has happened in the last decade is you've seen Brazil come along as an extremely strong poultry exporter. Two reasons for this are its cheap feed and the fact that Brazil specializes in bulk exports of frozen chicken. That being said, that's where the Brazilian niche is and they don't have a niche in processed or cooked meat." Hence, while Thailand will continue being a large poultry exporter, circumstance has mostly restricted it to the cooked chicken line.
However, while some countries adjust to new circumstances by moving up the value chain, others are reconciling themselves to the prospect of permanent dependence on imports, particularly in the case of red meat. Japan, Asia's largest importer, purchases a large proportion of all its meat lines overseas. Other countries such as Korea and Taiwan are also becoming increasingly dependent on imported meat, especially red meat.
Yet, the 800-pound gorilla of Asia's red meat market is, without a doubt, China. According to Bauer, "the key one [meat line] for this area is China and pork, mainly because of the cultural preference to eat pork and growing popularity of pork in China." While China does its best to counter its inevitable pork dependency with exports from other protein lines, within Asia itself, there are very few long-term avenues for self-sufficiency.
Take for example, Thailand, perhaps the region's most successful meat exporter. This global top five poultry exporter and leading seafood supplier has, on paper, great potential to satisfy the growing demand for pork from north Asian countries such as China, Japan and Korea. In theory, all Thailand's pork supply needs is a good, solid kick into technological modernization and higher quality production, accompanied by industry consolidation and some cold chain infrastructure construction.
Indeed, Thailand's agribusiness conglomerates have already demonstrated their prowess at whipping the country's poultry and seafood lines into export platforms. From a technical point of view, there is no reason that what was done with Thai chicken and seafood could not be done to its swine sector.
Yet, look more closely. Although it has a slightly higher per capita GDP than China, Thailand's per capita meat consumption is only about one half of China's. That's right - Thailand's reputation as a meat exporter depends on its poverty-driven low per capita meat consumption as much as it does on its clearly superior agribusiness model.
It is difficult to believe that Thailand is somehow exceptional. Sooner or later, per capita Thai meat consumption will inevitably rise, if not to western levels, to an amount comparable to present-day China. Although a serious global recession has delayed that day, it still begs the question of, 'when Thailand's per capita meat consumption comes to equal China's, will it have much poultry or pork left over for export?'
Clearly, many Asian countries desire, at the very least, self-sufficiency in meat. Major export lines, whether they be Thai shrimp or Chinese catfish, wish to retain their share of the global market. Yet, rising populations and advancing incomes relentlessly erode the position of both Asian meat importers and exporters. In this survey, we look at two countries on different trajectories. One is Asia's most successful meat exporter. The other may become its greatest meat importer. We look at the forces besetting their respective protein trade balances and what they are doing to take charge of their own destiny.
