August 4, 2017
Chinese pork imports on slowdown, drastically decline in Q2
After more than doubling year-on-year to 1.6 million tonnes in 2016, China's pork imports have started to slow down. They fell by around one third on a year earlier in the second quarter this year, which is the first time since the end of 2014 that quarterly imports have not increased on the year, according to AHDB Pork.
Chinese fresh/frozen pork imports fell 34% year-on-year in April-June, totalling 316,000 tonnes according to Chinese customs data. In June alone, shipments were 54% less than in the same month last year.
The weaker import demand comes following the recovery of Chinese domestic production, which had come under pressure for the past two years after the implementation of strict environmental regulations by the Chinese government.
The pork division of the UK Agriculture & Horticulture said the extremely high pork prices that prevailed in China last year could have encouraged some reinvestments. Data from the Chinese Ministry of Agriculture showed that slaughterings were almost 1% higher year-on-year in the first five months.
Lower prices of domestically produced pork also contributed to the reduced imports. Wholesale pork prices in China have declined considerably from the 2016 level. Prices for the week ended July 18 were 17% lower than the start of the year. Live pig prices have also followed a similar trend.
The EU was particularly affected by the decreased imports, as pork shipments to China fell 43% year-on-year in the second quarter, leading to a 10 percentage points drop in market share. The US was proportionally less affected, with shipments only declining 29% compared with the second quarter in 2016.
Conversely, Canadian pork shipments in the second quarter were 16% higher than last year. However, in June, a month after the discovery of ractopamine in Canadian pig trotters shipped to China in May, Chinese imports of Canadian pork were 37% lower than in June 2016 and 42% lower than the previous month.
The tainted-meat scandal in Brazil has also impacted on its trade with China, as shipments in June were down 76% year-on-year.
UK pork shipments to China, however, have continued to grow year-on-year. While the UK only occupies a small market share, this grew to 5% in June as the UK was the only significant country to expand shipments both over the previous month and June 2016. The good reputation of UK pork may be supporting demand, AHDB Pork said.
AHDB Pork cited the latest forecast of FAO-OECD that Chinese pork imports in 2017 would decline 25%, but the UK levy board said this might be too pessimistic.
Just the same, AHDB Pork said that it seemed unlikely imports this year would surpass the 2016 levels.-Rick Alberto