Chinese pork imports skyrocket in 2016
Chinese pork imports more than doubled on the year during 2016, reaching a substantial 1.6 million tonnes shipped weight and establishing the nation as the dominant global pork importer.
As was previously discussed here, the restructuring of the Chinese pig industry was key to driving import demand over the past year. Most of this growth occurred earlier in 2016, with volumes shipped in the final quarter up a more modest 32% on the year. However, it is worth noting volumes were already elevated in Q4 of 2015 and last year’s figures still represented more than double the volume imported during this period in 2014.
The EU was the main winner in capitalising on this market, supplying two-thirds of the imported product. This was particularly true early in 2016, driven by plentiful supplies, competitive prices and hormone-free production systems. However, as the year progressed, the EU lost market share to the increasing supplies of price-competitive US pork. Brazil also proved to be an emerging threat as, after gaining increasing access to China, it became its eighth largest pork supplier last year.
The UK was also successful in increasing shipments of pig meat to China during 2016. Volumes rose 31% on 2015 levels, reaching 43,000 tonnes. Higher pig prices in China enabled average unit prices to rise, so the value of these imports was up ahead of volume, almost reaching £50 million.
Annual offal imports were 72% above year earlier levels, reaching 1.3 million tonnes. In contrast to the pork market, this growth was relatively consistent throughout the year. While the EU remained the dominant supplier, with over 50% of the market share, growth in shipments from the US were significant. At over 424,000 tonnes, American shipments trebled on 2015 levels. This growth became more pronounced as the year progressed, as supplies of competitive US product increased.
Offal shipments from the UK was also up 32% for the year as a whole, exceeding 28,000 tonnes. However, during the final quarter, volumes were actually back 9% on 2015. This was influenced by increasing competition from US product and falling production within the UK.
In 2017 there are expectations that Chinese domestic production will increase, reducing the demand for imported product. This will be a concern for the global pork market, as China has been a key outlet in a background of lacklustre demand for pig meat in Europe and the US. Ultimately, unless alternative markets can be found, a fall in demand from China could begin to put pressure on global pork prices this year, particularly in light of the expansion in US production.
Bethan Wilkins, Analyst
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