July 16, 2007

China goes shopping for pork abroad to curb shortage at home

Rumours that China may be buying 20,000 tonnes of pork has triggered a sharp increase in US pork prices on the Chicago Mercantile Exchange last week.

Pig diseases in China and high feed prices discouraging pig farming has caused a pork shortage in China in recent months that in turn drove prices 30 percent higher.

Economic growth has also meant a population that is finding US pork more affordable.

However, the US may not be the sole supplier of pork to China as it may seek pork supplies from four other countries. The good news is that China may seek up to 100,000 tonnes of pork in total.

If China were to purchase such a large amount in a month, it could trigger higher global prices, an analyst said.

China has traditionally been a cost-conscious buyer and bargain hunter, which means it may be looking for lower-priced pork cuts and for chicken, US meat industry sources said.

China became the fifth largest buyer of US pork in the first four months of this year, up from sixth in the same period in 2006. The country's US pork and pork product purchase in May rose 26 percent on year to 35,150 tonnes, according to the USDA.