We've reported at length recently about China's pork production chal-lenges. Earthquake damage, severe weather and devastating disease outbreak have all taken their toll on China's pork industry, driving home the need for new investment to restore pork output.
But while its pork industry struggles to get back on its feet, and optimitistcally looks toward a vibrant future, consumer demand for pork in China is anything but struggling. The result? A surge in export opportunities for other countries to squeeze a bit of profit out of China's pork problems.
According to Erin Daley, US Meat Export Federation (USMEF) manager of research and analysis, conditions have caused China to rise considerably on the list of who's who among pork importing countries. He notes that China's imports have increased beyond anyone's forecasts. Projections by USDA are for China's imports to increase by 15 percent in 2008 and another 12 percent in 2009. That would be building on recent trends. China's total imports in 2007 increased 116 percent according to statistics reported by the Global Trade Atlas (GTA), while Hong Kong's total pork imports increased by 38 percent. The data from GTA includes variety meats.
Such gains would give rise to China's quick ascent on the list of importing countries for pork, with USDA forecasting China to run neck-and-neck with Canada's imports and surpass that country's level of imports soon thereafter. For comparison, China's imports are forecast to be about equivalent to Canada's imports by 2010, and exceed Canada's imports through the rest of the outlook period. It's still important to look at the big picture, however. Both China and Canada are net exporters over the USDA's entire 10-year forecast through 2017. In fact, China's exports are nearly equal to China and Hong Kong's combined imports. While the USDA has revised China's exports down slightly, it also recently revised the 2016 import estimate to 256,000 metric tons, or nearly five times larger than earlier estimate for China's pork imports in 2016 made a bit over a year ago.
Pork continues to lead in China's per capita meat consumption with a whopping 64 percent consumption compared to its next largest competitor, poultry, at 19 percent. China's sudden growth in import activity to meet consumer demand has captured the attention of more than a few countries hoping to increase exports to the region. Until recently, only a handful of countries could legally export pork to China, although despite rather strict access conditions, a wide variety of pork by-products entered the country via Hong Kong from the United States, Canada,.Denmark, Brazil, Germany, the Netherlands, the United Kingdom, Belgium and Spain.
According to the USDA, during 2007 the United States accounted for 44 percent of China's and 5 percent of Hong Kong's pork imports. When variety meats are included, the United States accounted for 26 percent of China's imports (the European Union had 63 percent with France as the largest supplier) and 10 percent of Hong Kong's imports (the EU had 46 percent followed by Brazil with 17 percent). Most of China's consumption continues to be at-home use, although the country's foodservice industry is beginning to become more of a force and with rising incomes, dining out is becoming more common, especially in major cities. This has led to growth in number and diversity of restaurant as a significant portion of end users for pork.
Among those taking notice of the growth potential is Germany, itself a leading pork producer in Europe. Recent media reports are that Germany's pork industry is turning its attention to China and the growth opportunities there, particularly for products such as pigs' ears, feet and other products in demand by the Chinese population. Following two years of negotiations, Berlin recently sealed a deal in Beijing that will open the door to China for German pork. A spokesperson for the German Farms Association has been quoted as saying he sees opportunity particularly for products that have little value in Europe.
German pork production is expected to reach 4.6 million tonnes this year, 30 percent of which is headed for export. Meanwhile the emergence of a quickly expanding Chinese middle class is fuelling the demand for meat, leading to what some see as golden opportunities for foreign exporters willing to face a thick web of regulations and restrictions that can prove to be daunting. Currently the United States, Denmark, France and Canada are the biggest meat suppliers to China, according to USDA statistics. But Germany could be in position to overtake countries like the Netherlands that have continued to work on ironing out details with China.
According to news service reports quoting spokespersons from the German pork industry, in the coming months five to 10 applicant companies are set to win approval and begin deliveries in 2009, although volumes are not expected to cause a glut in the Chinese market. Still, it's clear that while China faces the task of rebuilding, suppliers elsewhere are attracted to the opportunities, a trend some believe may pave the way to greater exports to the rest of Asia.