August 22, 2007

 

US pork exporters could gain from China's high pork prices

 

 

High pork prices in China currently could bring immense benefits to US pork, according to a recently published report from USDA's Global Agriculture Information Network (GAIN). 

 

Pork prices in China have been rising in recent months as disease was said to have wiped out significant pig populations.

 

Exports of US pork to China exceeded US$100 million in 2006, a record high.

 

Although restrictions such as health risks and feed additives are currently hampering trade for some US suppliers, on the whole, the prospects look promising, the report said.

 

US pork is very competitive where production costs are concerned.

 

In China, the corn prices directly affect pig prices. As China's corn prices rise, US pork can gain an edge over the competition, the report said.

 

Meanwhile, land constraints will prevent significant expansion of the Chinese pork sector.

 

At the same time, China also has to face an increasingly affluent population with higher demand for pork, which would thus benefit producers.

 

The GAIN report also outlined key areas where meat producers may be able to penetrate China's food sector and reviewed price indices in relation to rising grain prices, environmental constraints and the ways overseas markets impact China's pork market.

 

Other factors that influence pork price, such as market corrections, seasonal preferences (more fish and vegetables are consumed in the summer), and government programmes to stimulate swine sector growth, are also discussed.

 

The GAIN report says that increased meat prices will become a general trend in China and although pork price increases are slowing down, a steep drop is unlikely. Prices look likely to remain high, thus providing opportunities for foreign producers.