February 4, 2009

 

China's overseas purchases and imports of pork and pork products in 2008 were unprecedented for any single country in history, according to US Meat Export Federation (USMEF) calculations from just-released Chinese trade data.

 

Based on import totals from China and Hong Kong, the country imported 1.925 million tonnes of pork and pork products last year, including 1.161 million tonnes of pork variety meats and 764,000 tonnes of pork cuts.

 

Available trade data suggests that China's imports eclipsed the previous single-year record of 1.022 million tonnes of pork imported by Japan in 2005.

 

USMEF Asia Pacific region senior vice president, Joel Haggard said the volume demonstrates the huge influence China can have on global markets when supply and demand becomes imbalanced.

 

Haggard added that the import volume, though huge, represents less than 5 percent of China's consumption.

 

USMEF estimates that total US pork and pork product exports to China and Hong Kong reached 386,000 tonnes valued at nearly US$700 million in 2008.

 

The EU and Brazil were the other major pork suppliers to the region.

 

Haggard believes it is unlikely that China's pork imports this year will match last year's record.

 

Increased industry profitability last spring, coupled with a range of hog raising subsidies, has resulted in a substantial expansion of China's herd, and lower hog and pork prices.

 

Live market hog prices in China averaged RMB12.75 per kg, 25 percent below the record RMB 17.04 per kg price set in April last year.

 

According to the National Bureau of Statistics, by the end of the third quarter of 2008, China's live hog inventory had increased 6.6 percent from 2007, and the sow population increased 12.4 percent.

 

Total marketed hogs increased 5.8 percent and meat production was up approximately 6 percent.

 

Haggard also said that it is unlikely that China's pork imports this year will match last year's record.

 

Increased industry profitability last spring, coupled with a range of hog raising subsidies, has resulted in a substantial expansion of China's herd, and lower hog and pork prices.

 

Although the post Lunar New Year early spring period usually marks the annual low point in demand, USMEF has heard reports of serious respiratory disease outbreaks that could be adding a bearish tone to the market.

 

It expects imported variety meat demand to hold through 2009, although US muscle cuts face stiffer competition from domestic supplies.

 

China's National Development and Reform Commission, in concert with key ministries including the Ministry of Commerce, the Ministry of Agriculture, AQSIQ and the Ministry of Finance, announced January 12 a new temporary pork price stabilisation program designed to smooth out the country's unstable hog cycle.

 

The program establishes an early-warning system for low live -hog and pork prices based upon the ratio of live hog to grain prices.

                            

US$1 = RMB 6.83 (Feb 4)