September 15, 2020

 

Germany pork exports restricted to EU, others to benefit from increased exports to China

 

Germany's pork exports are locked to the European Union as major markets like China, Japan and South Korea have announced a ban on pork imports from Germany following a discovery of African swine fever (ASF), Reuters reported.

 

Wholesale swine prices in Germany dropped 14% after the country reported a positive ASF case found in a wild boar carcass east of the country bordering Poland.

 

André Vielstaedte, spokesman for Toennies, Germany's largest meatpacker and exporter, said China's ban will badly affect the swine industry and its farmers in Germany. Germany swine exports to China are worth US$1.2 billion per year.

 

Germany is discussing a regional ban with China limited to area where the ASF case was found. This is an arrangement Germany has with the rest of the European Union.

 

Matthias Quaing from ISN, the German pig farmers' association, said supermarkets could use this situation to drop prices for pork, possibly shutting down many farmers.

 

The ASF situation has compounded a difficult year in Germany, after the COVID-19 pandemic caused meat plants in the country to shut down.

 

Tim Koch, meat analyst at German independent market consultancy AMI, said there are no alternative pork export markets as large as China or other countries in Asia. German pork exports to China and Asia include parts unwanted in Europe such as swine ears, noses and feet.

 

With China's imposed ban on pork imports from Germany, rival swine exporters could seize on the opportunity such as the United States, Spain, Canada and Brazil, or other EU exporters such as the Netherlands and Denmark, according to Justin Sherrard, Rabobank analyst.

 

US' Chicago Mercantile Exchange hog futures have gone up to its highest in six months.

 

Joe Schuele, spokesman for the US Meat Export Federation, said the US is ready to export additional pork for the rest of the year, be it to China or other markets.

 

The biggest pork producer in the US, Smithfield Foods is owned by WH Group Ltd from China.

 

ABPA, the Brazilian association representing pork and poultry processors said Brazil has exported 50,700 tonnes of pork to China in August, representing a 168% year-on-year increase.

 

Richard Davies, executive vice-president of sales at Olymel lp, a major pork exporter in Canada said the country has limited room to boost sales to China as the latter accounts for close to half of all Canada's pork exports. Another major Canadian pork exporter, Maple Leaf Foods, has been banned from exporting pork from its plant in Manitoba after a COVID-19 outbreak was discovered there.

 

The swine industry in the European Union is hoping that China and Asia will increase pork imports from Spain, Denmark and the Netherlands to stop swine oversupply within the region.

 

While a spokesman for Denmark's major pork exporter Danish Crown said the company does not have the capacity to boost sales to China, Spanish pork production could see increased export sales to the biggest pork consumer in the world, according to Spain's Interporc industry association.

 

Major pork producers in Spain are the Jorge Group and Vall Companys.

 

-      Reuters