Alternative Asian markets support EU exports
EU exports of all pig meat products (including offal) to third countries grew by 5% year-on-year in the first three months of 2017, according to latest figures from the EU commission. A rise in demand for pig meat from Hong Kong (+12%), Japan (+9%) and South Korea (+38%), outweighed a year on year decline in volumes shipped to the EU’s largest destination China (-3%).
An increase in shipments of fresh/frozen pork was the main driver behind the overall rise in exports of total pig meat. Shipments of pork were 9% higher than in Q1 2016, with volumes to both Hong Kong and South Korea increasing by around a third on the year. Exports to the US were also up 13%, while Japan showed a more modest 4% growth. Conversely, shipments to China were down 2% compared to the period in 2016.
Furthermore, offal exports were affected by a slowdown in Chinese demand (-4%), with the Philippines also taking 14% less. However, overall the decline in total offal shipments was negligible during the first quarter of the year. Volumes exported to Japan more than doubled, while shipments to South Korea were up 67% compared to Q1 2016.
EU production is expected to have been down on the year during Q1, so positive developments in trade suggest that exports are becoming an increasingly important part of the EU pig meat market. While strong export demand is likely lending support to the EU pig price, the market will also be increasingly exposed to global trends. Although, demand from China and other Asian markets is expected to remain strong this year. Looking forward, with growing competition from the Americas (read more here), the extent to which the EU will be able to capitalise on this is more uncertain.
Bethan Wilkins, Analyst
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