In-depth: China continues to import less pork
In the last quarter of 2017, Chinese fresh/frozen pork imports fell 13% year-on-year, totalling 296,000 tonnes. This is a continuation of the downward trend for pork imports seen since Q2 of 2017. However, the pace of the decline has slowed following further farm closures and relocations towards the end of 2017.
The total fresh/frozen pork imports to China in 2017 were over 1.2 million tonnes, a 25% fall on the year. Major pork exporting countries recorded drastic declines to shipments. Proportionally, Denmark recorded the largest drop, with imports falling 44% year-on-year, losing two and a half percentage points of its market share. This was closely followed by Germany and the United States whose imports fell 39% and 23% on year earlier levels, respectively.
The UK however, had more success, and recorded year-on-year volume growth to China. Over the course of 2017 the UK shipped almost 46,000 tonnes of fresh/frozen pork, up 6% on 2016 quantities. A few minor exporting countries, most notably Mexico, also increased shipments. Following authorisation to export to China in 2016, Mexico has substantially increased its pork exports to China. Nonetheless, in the context of overall Chinese imports, shipments remained negligible, totalling just 1,433 tonnes in 2017.
This declining import demand reflects the ongoing recovery in Chinese domestic production. In 2017 domestic pork production is expected to have increased 2% year-on-year as the expansion of larger farms continues. This in turn has put downward pressure on Chinese pork prices, making it more competitive with imported alternatives. As well as this, enhanced living standards and income in China due to the growing middle class population is reducing the speed of pork growth in China. While pork is still the most favourable meat for the Chinese, industry reports suggest that consumer demand for other protein sources including chicken, beef and lamb has grown, especially among the more affluent consumers.
Annual imports of Chinese pig offal were also down 7% on the year. Most of this decline was driven by fewer shipments from Germany and Denmark. Imports from the UK also fell 6% year-on-year. Offal imports did pick up in the final quarter, at over 358,000 tonnes, imports were 1% above Q4 2016. This was mainly from an uplift in shipments from the United States and Spain, by 21% and 4%, respectively.
The latest industry reports anticipate Chinese pork production to increase in 2018, supporting a reduction of imports. However, challenges exist before the pig industry can truly transition. There is a lack of efficiency in the pig supply chain. Generally, slaughtering plants are not within the vicinity of pig production areas and there is a lack of modern chill chain infrastructure. These challenges present issues to the industry and in some cases it may be more economical to import pork, continuing to support imports into China.
Abigail Schofield, Trainee Analyst
Abigail.Schofield@ahdb.org.uk, 024 7647 8610