December 1, 2011

 

Rising imports unlikely to affect China's pork industry

 

 

Rising pork imports are unlikely to be detrimental to the domestic pork industry, even though imports of the meat are expected to reach a record high this year in China, according to experts.

 

China used to produce enough soy to satisfy domestic demand, but with the arrival of cheaper genetically modified soy from the US five years ago, China has instead become the world's biggest importer of soy. Some are concerned that the pork industry will also be pushed aside by imports.

 

"The amount of China's pork imports is far from enough to do any harm to domestic players," said Ma Chuang, deputy secretary-general of the China Animal Agriculture Association.

 

China consumes some 50 million tonnes of pork each year, and the world's total pork exports only come to about 6million tonnes a year, according to Ma.

 

"Imported frozen pork does not have any advantage in taste and quality. And domestic consumers prefer fresh meat to frozen products, so domestic supplies will still dominate the market," said Feng Yonghui, an analyst with pork industry portal soozhu.com.

 

In the first nine months of this year, China imported 870,000 tonnes of pork and by-products, up 44.6% on-year.

 

Ma predicted that the total amount of pork imports would top one million tonnes this year, above the historic high of 910,000 tonnes in 2008.

 

"The domestic market saw a short period of tight supply this summer, which was the major reason behind the surge in imports," Feng noted.

 

But experts agree that the surging pork imports are only a temporary phenomenon, and with domestic supplies catching up, imports will gradually be reduced.

 

Statistics from the Ministry of Commerce last week showed that pork prices had fallen for the eighth consecutive week, which also shows that domestic supply is recovering.

 

Currently, the wholesale pork price is about RMB16 (US$2.50) per kilogramme, 10% lower than in September.

 

"With domestic pork prices cooling, imported pork has lost its price advantage. This means that orders for imported pork will see an obvious decline in the rest of this year," Feng said.

 

Currently, China imports pork mainly from the US, Canada and Denmark. Last year, Denmark provided some 40% of China's total pork imports.

 

But in the first nine months this year, the US has accounted for some 60% of China's total pork imports, according to Ma.