China’s pork supply endangered by African swine fever
April 23, 2019 Category Uncategorized
There is not enough pork in “the whole world combined” to fill the potential supply shortfall that will hit China later this year, market analysts have warned. Pork exporting countries around the world are scrambling to fill the supply gap in China as an African swine fever epidemic sweeps across the country. Financial services firm Rabobank estimates that China could lose up to 200 million pigs to disease or slaughter during the epidemic, almost three times the pig population in the United States. China is the world’s biggest pork producer, with roughly 433 million pigs, according to the U.S. Department of Agriculture (USDA). The loss of half of the country’s pigs could push prices up by as much as 70%, a Chinese Agriculture Ministry official said.
Rabobank Senior Analyst Pan Chenjun said pork production would fall in China this year and next. “A lot of herd will disappear due to infection and liquidation,” Pan said. “There will be a great shortage. We don’t think any country in the world – or the whole world combined – could cover this supply gap. Even after increasing imports, there remains a supply shortage.” China is estimated to have about 200,000 tons of pork in its reserves, but this is just a fraction of the supply needed to satisfy demand in the world’s biggest pork market. That shortfall is reflected in the number of Chinese buyers turning to the U.S. for pork.
Before the trade war began, U.S. pork exports to China were subject to 12% import duties. Two tranches of tariffs worth 25% each saw that rocket to 62%. Yet, despite the huge added cost, Chinese buyers started putting orders for U.S. pork products again in March in anticipation of the shortage and in the hope that by the time the shipments were to be made, the tariffs would have been relaxed as part of a trade deal. “Actual shipments are not that common at the moment,” Pan said. “What we are seeing is Chinese companies making an offer and trying to hold the shipment for later.”
According to China Customs, in spite of the tariffs imposed last year, China still imported 10,917 tons of pig meat and 12,212 tons of pork offal from the U.S. in the first two months of 2019. However, compared to the same period of last year, the import volumes have decreased by 30.8% and 65.1% respectively. Canada was one of the major suppliers last year, the third highest behind Germany and Spain, and accounting for 13.4% of China’s pork imports in 2018, the South China Morning Post reports.
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