May 16, 2012

 

Irish pork exports grow rapidly

 

 

Pork exports from Ireland are growing fast and in the previous year, it has made its second most important export to China.

 

Rising wealth in China has translated into surging demand for meat, which has sparked efforts to modernise the country's agribusiness sector and also translates into opportunities for Irish meat processors.

 

That the Chinese are obsessed with food is no surprise to anyone who has visited the country. This is a country emerging from years of poverty and, for most people, it is only a couple of decades since meat was something eaten only at Chinese new year or other special occasions.

 

The Great Helmsman himself, Mao Zedong, loved pork. "Chairman Mao's Favourite Pork" is a Hunan dish of braised pork belly that delights both Chinese and foreign palates, while one of the most important works of art in Chinese history is a Qing Dynasty carving of a piece of pork, complete with lean and fatty layers.

 

It's hard to overstate the importance of hogs in China. The cost of pork has such a powerful impact on inflation that a recent report by Rabobank was entitled Is the CPI the China Pork Index?

 

China does not release details of its consumer price index basket, but pork is certainly a major element.

 

April CPI data released last week showed inflation had slowed because of a slower increase in the price of pork - prices rose by 5.2% in April from a year earlier, compared with 11.3% annual growth seen in March.

 

Of all the pigs raised in the world, half are in China, and half the world's pork - some 50 million tonnes - comes from the country. But they are raised in small farms; last year, less than a quarter of China's pigs were raised in industrialised farms with more than 500 pigs.

 

"Anyone producing pork in the world today is looking at what is going to happen in China over the next couple of decades," Joel Haggard, Asia Pacific senior vice-president of the US Meat Export Federation, told a meeting of the Foreign Correspondents Club of China, held in the Irish Embassy in Beijing.

 

China may be producer and consumer of more than half of the world's pigs, but, incredibly, until 2008 its meat market was almost completely divorced from the rest of the world, said Haggard.

 

"What happened in China had no influence on the global market, and what happened in the global market had no influence in China, but all that changed," he said.

 

Until 2007 prices for pork were very low. Then, for various reasons, including disease, China started to import, and prices spiked globally. Now the country has a huge impact on the global market.

 

China is 97% self-sufficient in pork. "But if domestic production drops to 90%, that amounts to the total current world trade right now," he said. "If China comes in and just orders a hundred thousand tonnes of extra pork, it has tremendous influence on the market."