June 10, 2013

 

China's imports of US pork drop 19.6% in April

 

 

Chinese imports of US pork have tumbled by 19.6%, contributing to a "sluggish" performance for US meat exports.

 

China imported 25,640 tonnes of US pork in April, compared with nearly 32,000 tonnes a year before, the US Meat Export Federation said.

 

The data come the week after Shuanghui, which controls China's top pork processor, agreed the takeover of Smithfield in a deal which it said would provide the US group "the opportunity to expand its offering of products to China".

 

"Together, we will be able to meet the growing demand in China for pork by importing high-quality meat products from the US," Shuanghui said.

 

However, in April, US pork had struggled to compete with China's own supplies.

 

The decline in US shipments, ran 12% lower on-year in the January-to-April period, was "mostly a reflection of low domestic prices", the Federation said, if adding that these have "begun to stabilise in recent weeks".

 

Chinese hog production margins, whose poor rates have encouraged hog liquidation, nonetheless remain depressed, estimated by the country's National Development and Reform Commission at 5.5:1 as of May 22, below the breakeven point of 6:1.

 

US imports to China are also being hurt by Chinese curbs on ractopamine, a growth inhibitor, which Smithfield has removed from much of its production capacity.

 

The decline in Chinese exports contributed to a 5.2% decline to 174,073 tonnes in US pork exports overall in April, with beef shipments dropping too, by 8.8% to 86,433 tonnes.

 

"The overall trend for US beef and pork exports remains sluggish, driven by market access issues and oversupply of domestic product in key markets," the US Meat Export Federation said.

 

Besides China's curbs, Russia has introduced stringent restrictions on imports of US pork and beef over ractopamine concerns, which have also prompted it to clamp down on purchases from Canada and Mexico too.

 

Russia's imports of US beef in April plunged to just 10 tonnes, from 9,561 tonnes the year before, with purchases of pork tumbling 93% to 715 tonnes. Russia's restrictions have cost the US pork industry US$58 million so far in 2013, and the beef sector US$97 million, the US Meat Export Federation said.