August 16, 2021


AHDB: China's pork imports no longer growing



In the first half of 2021, there had not been further increase in Chinese pork import requirements, according to the United Kingdom's Agriculture and Horticulture Development Board (AHDB).


Volumes totalled 2.8 million tonnes, just 4% above last year. In the second quarter alone, volumes were actually 9% lower than in 2020, at 1.4 million tonnes.


Shipments in Q2 last year received an additional boost due to difficulties supplying the market in Q1, because of COVID-19. However, this is not the only reason imports have been behind last year's levels recently; Chinese demand for imported pig meat appeared to be falling.


Inside China, both live pig prices and pork wholesale prices have been falling. This makes imported pork less competitive.


Prices have fallen in response to increasing pork production in China. Some herd recovery is now underway, which may mean the peak of import demand has passed, and so volumes could be expected to generally ease back from here, said AHDB.


However, the road to recovery is a long and unlikely to be smooth — volatility was seen developing in recent production trends, said AHDB analyst Bethan Wilkins.


Reports indicated there has recently been a short-term spike in pork production in China. Some resurgence in ASF outbreaks earlier this year encouraged higher slaughter levels, and some destocking from farms that are no longer profitable, as prices have come down. This is expected to lead to particularly poor import demand in Q3. Some subsequent recovery in both pork prices and import demand would be expected after the influence of this phase eases. Official statistics show that the number of breeding sows in China fell again at the start of this year, and has not yet recovered to late 2020 levels.


The European Union is particularly reliant on China as an export market, so any weakening of import demand is likely to have particular influence on the market there, according to Wilkins.


With the UK market so closely linked to the EU, this will also have implications in the former. Wilkins pointed out that the weakening of EU prices was showing.


Chinese imports from the United States have already been falling so far this year (-21%), influenced by unattractively high US prices. This at least moderates the international competition UK/EU exporters face on the Chinese market at the moment, although US prices have dropped back from a peak in June more recently.


Wilkins noted that China has been increasing its imports of live breeding pigs again this year. Total imports for the first half of 2021 were more than double last year at 1.2 million head. About half of these were supplied by the US, with the other half coming from Europe, including some from the UK (46,000 head).