Pork was the second-largest U.S. agricultural export product to China before trade wars began in 2018, and given the spread of African Swine Fever in China, many market observers expect the U.S. pork industry to benefit from the 90-day “truce” the two countries agreed on at the beginning of December.
Not so fast, says Rabobank Senior Analyst Chenjun Pan in a new report, “Will the trade war truce boost China’s pork imports from the U.S.?”
Overall, Pan notes that Chinese demand for pork is weak, even though several major festivals are around the corner.
In the southern part of the country, consumers strongly prefer fresh meat; what frozen meat they do eat for the next several months can be easily supplied by substantial frozen meat in cold storage in the northern half of the country. As live hogs in most parts of the country cannot be transported, in order to control the spread of ASF, they have been slaughtered closer to home in greater numbers than they normally would be.
The transportation ban, in fact, has been more disruptive to the Chinese pork market than the disease itself, according to Pan.
“Additional imports from the U.S. are possible during the trade truce, but they will reflect political rather than market needs,” Pan wrote.
Rabobank projects that China will see a big drop in pork production and consumption in 2019, but by how much and how quickly is unclear. China’s network of small-farm hog production is believed to be hanging on to their animals in anticipation of higher prices in the next year. Meanwhile, consumption of protein has switched measurably from traditional pork to poultry and beef, and retail prices for these proteins are rising.
Source : Meatingplace