print
print

China’s Large First-Quarter Pork Production Pressures Prices, Imports

According to China’s National Bureau of Statistics, first-quarter pork production totaled 16 million metric tons (mt) – up 3.4 percent from a year ago. This increase helps explain China’s lackluster hog prices, which have been falling since December. Last week prices averaged $0.81 per pound, down 13 percent from a year ago. In an effort to stabilize prices, China’s National Development and Reform Commission (NDRC) announced the first round of the government pork stockpile plan on March 27. But provinces have only recently begun announcing implementation details of the NDRC plan, so government purchases of frozen pork are likely to happen at the end of April, and any potential market impact is yet to be seen.

China-Pork-VM-Imports

Ministry of Agriculture (MOA) data showed China’s March hog inventory numbers were steady with February, but down 2 percent from a year ago to 434.6 million head. At 47.9 million head, the March sow herd was 5 percent smaller year-over-year. China’s hog inventory and sow herd peaked in October 2012 (at 472.8 million head and 50.8 million, respectively) and have since gradually declined. At the same time, improvements in production efficiency and limited disease issues have resulted in more pigs per sow and larger pork production.

It should also be noted that MOA is now in charge of tracking the hog slaughter and reporting slaughter statistics, rather than the Ministry of Commerce. March hog slaughter was reportedly up 15 percent from a year ago, but it is likely that this number will be revised lower. So the first-quarter pork production figure (+3.4 percent) is a more realistic indicator of China’s year-over-year increase in production.

USDA’s latest estimates (published April 18) show that China’s 2014 pork production is expected to increase 2.4 percent to a record 56.95 million mt. FAS specifically notes the Chinese government’s support for hog production, as well as efficiency gains, as factors driving production growth. FAS also forecasts increases in 2014 pork imports for China (+2.6 percent) and Hong Kong (+11.5 percent), both to new records.

China’s pork/pork variety meat imports were lower in March and in the first quarter, compared to last year. March imports from the United States (34,077 mt) increased 9 percent from a year ago but were still down 15 percent (to 86,463 mt) for the quarter.

While several EU member states saw growth in March and in the first quarter, China’s total imports from the EU were lower due to smaller volumes from main suppliers Denmark and Germany. (The decline in imports from Germany was due in part to a major plant delisting, but the plant was recently reinstated.)

First-quarter results for EU suppliers (compared to a year ago) included:

Denmark: 53,068 mt -10 percent
Spain: 39,566 mt+28 percent
Germany: 27,648 mt -52 percent
France: 21,081 mt +12 percent
Poland: 21,281 mt +44 percent

First-quarter imports from Chile (11,532 mt, +48 percent) also saw significant growth while imports from Canada (31,192 mt, -18 percent) were lower.

Sources: USMEF-Beijing, MOA, China’s National Bureau of Statistics, Global Trade Atlas and USDA/FAS