May 14, 2018
China pork imports down 10% in 1st quarter
Chinese pig meat imports in the first quarter declined 10% compared with 2017 levels, mainly attributed to low domestic pork prices and oversupply, AHDB Pork reports.
It said that in total frozen pork imports fell 6% year-on-year during the reviewed period to 324,000 tonnes and pig offal plunged 15% year-on-year to 271,300 tonnes.
EU shipments bore most of the drop in pork imports, according to the pork division of the UK levy body Agriculture & Horticulture Development Board. Pig meat imports from the 28-member bloc were down 14% (-58,800 tonnes), resulting in its market share declining by two percentage points.
US and Canadian shipments also declined, by 11% (-13,700 tonnes) and 9% (-6,500 tonnes), respectively. Imports from Brazil increased by almost 8,000 tonnes.
AHDB Pork noted that the decline in shipments reflected low domestic pig prices which, it said, have characterised the Chinese market in early 2018. "Prices have been falling since January, and by week ended 25 April averaged 10.71 CNY(US$1.70)/kg liveweight (equivalent to 1.22p/kg), the lowest price on records going back to 2013", it said.
In contrast, last year's live pig prices in the same period averaged 15.57 CNY/kg, and in 2016 reached 20.03 CNY/kg. "As such, it is likely many producers are now in a loss-making situation", AHDB Pork said.
AHDB Pork further noted that prices have continued on a general downward trend, although the rate of pig price decline slowed somewhat after the Chinese government announced that an additional 25% import tariff would be imposed on US pork imports starting April 2. This suggests that the level of supply on the market continues to exceed demand, it said.
AHDB Pork also said the oversupply situation is likely driven by production growth exceeding the level of consumer demand. In 2017, the US Department of Agriculture estimated Chinese pork production's increase at around 1%. USDA forecasts a further 2% growth for 2018 (+1.3 million tonnes carcase weight equivalent).
While pork remains the primary meat for most Chinese consumers, growth in demand for pork in China is starting to slow as competition from beef, mutton and seafood is increasing. Like in western countries, it was observed that Chinese consumers are increasingly switching into seafood and poultry, which are perceived as healthier.