September 8, 2003

Imports of Beef and Pork to Hong Kong Expected to Increase Moderately;Imports of Chilled Pork from Thailand Expected to Decrease

Imports of beef and pork to Hong Kong from all sources, excluding re-exports to China, are expected to increase moderately by 3 percent and 2 percent respectively for 2003.  Beef imports from the United States increased by 21 percent during January - June 2003 compared to the same period in 2002. 

Due to recent escalating beef prices in the United States, it is expected that this high rate of growth will not be sustained for the second half of 2003.  U.S. beef sales could strengthen during the late winter months when U.S. beef prices are forecast to moderate. 

The United States is not a significant pork supplier to the Hong Kong market primarily because U.S. pork products are not price competitive with China.  The Hong Kong catering business plunged earlier this year because of the SARS outbreak and resulted in far less meat sales to that industry.

 Hong Kong consumers now consume more frozen meats, both pork and beef, because they are more receptive to frozen meats, which are now easily available in supermarket chains.  In contrast, the consumption of freshly slaughtered meat is forecast to decline gradually.  Hong Kong is a mature market and no drastic changes in demand are expected.

China and Brazil are the two major pork suppliers for the Hong Kong market occupying a market share of 43 percent and 22 percent respectively.  The U.S. pork prices are relatively more expensive, thus U.S. pork accounts for about 2 percent of the market share.

Importers commented that prices of Brazilian pork have increased in recent months as Brazilian pork started to supply the Japanese market.  It is expected Hong Kong importers will buy less from Brazil and buy more from China in the coming months.

For the remaining of 2003 and 2004, Hong Kong's imports of chilled pork from Thailand are expected to decrease after significant increases in the three consecutive years since 2000.  Three factors may drive imports from Thailand to decline.  First, consumers now know how to distinguish chilled pork from freshly slaughtered pork.  Secondly, the new licensing requirement prevents retailers from displaying chilled meat as freshly slaughtered pork, making Thai pork less appealing to consumers.  Thirdly, the prices of freshly slaughtered pork have dropped to a level that profit margin of Thai chilled meats is not as attractive as before.