August 23, 2024

 

Russia's pork producers target taking up 10% of China's pork imports

 

 

Russian pork producers are aiming to capture 10% of China's pork import market in the coming years, seeking to take advantage of trade tensions between the European Union and China, the world's biggest pork consumer.

 

Russia did not export any pork to China until February, when Beijing authorised three Russian producers to sell pork into the $3.5 billion Chinese import market, which is dominated by EU producers with a 51% share. The trade adds to the growing economic ties between Russia and China in the face of increasing sanctions against both countries by the West.

 

The EU recently set provisional duties of up to 37.6% on electric cars imported from China to counter what it said are unfair subsidies. In response, China named Danish, Dutch, and Spanish pork firms as targets in an anti-dumping probe.

 

"For us, these trade tensions represent a chance to showcase our competitiveness in the Chinese market," Yuri Kovalyov, the head of Russia's National Union of Pig Breeders, told Reuters, adding that producers were not seeking to exploit the tensions on purpose.

 

Kovalyov said Russia's goal was to supply 10% of China's pork imports within three to four years. It will face stiff competition from other major pork exporters, such as Brazil, plus rising Chinese output. Demand for pork is also falling in China, though it still consumes about half of the world's pork, or 53-54 million tonnes a year.

 

Russian pork production is expected to reach 5.2 million metric tons in 2024 from 4.9 million metric tons in 2023, Kovalyov said.

 

Current production makes Russia the fourth largest producer, behind China, the EU, and the United States, and puts it on par with Brazil.

 

China's imports of pork and offal fell 27.3% year-on-year to 1.11 million tonnes in the first half of 2024, its customs data show.

 

Kovalyov sees about 50,000-60,000 tonnes of Russian pork heading to China this year, around 3% of China's total imports, as forecast by the US Department of Agriculture.

 

Much of China's imports from the EU are offal, such as ears and feet, rather than muscle meat. Russian domestic demand for offal is low, as it is in the EU.

 

Kovalyov said Russian pork exports were currently 60% meat and 40% offal – similar to the mix in China's imports.

 

The Russian private producers authorised to sell pork to China – Miratorg, Velikoluksky Pig Breeding Complex, and Rusagro – are among Russia's top five pork producers.

 

"We cautiously estimate that we will export 10,000 tonnes to China this year," said Rusagro deputy chief executive officer Alexander Tarasov. "The prices are at a premium of 30-40% to domestic prices."

 

Miratorg said it had made the first deliveries from its logistics hub in Russia's Belgorod region to the port of Nansha in southern China by both rail and sea. The company added that its overall pork exports jumped 70% last year and it plans to increase pork production by 5% to match demand growth.

- Reuters