China has imported substantial amounts of pork this year in an effort to temper inflation and satisfy public demand. As a result, pork imports into the country are expected to reach a record high this year. However, experts say the imports are not likely to hurt China's domestic pork industry, according to the Global Times.
Through the first nine months of this year, China imported 870,000 tons of pork and byproducts, up 44.6 percent over last year’s level. The increase was driven by shortages created by China's farmers having previously cut herds due to profitability challenges as well as disease issues.
With pork the No. 1 consumed meat in the country, supply shortages drove China's pork prices up, which in turn pushed overall inflation higher.
China consumes about 50 million tons of pork annually, while the world's total pork exports tally just 6 million tons a year, says Ma Chuang, deputy secretary-general of the China Animal Agriculture Association.
The U.S. pork industry has benefitted from China's increased imports, with strong sales this summer and into the fall. That strong demand has played a significant role in making 2011 a record export year for the U.S. pork industry, adding an estimated $54 per hog to producers' prices. Overall, exports will claim nearly 27 percent of this year's production.
Approximately 60 percent of the pork entering China is coming from the United States, with Denmark and Canada providing the bulk of the remaining supply.
Ma predicts that total pork imports into China would hit 1 million tons this year, which exceeds 2008's record of 910,000 tons. Still, that is "far from enough to do any harm to domestic players," Ma, told the Global Times.
Some in China are concerned that its pork industry will be pushed aside by imports. "Domestic consumers prefer fresh meat to frozen products, so domestic supplies will still dominate the market," Feng Yonghui, an analyst with pork industry portal soozhu.com, told the Global Times. "The domestic market saw a short period of tight supply this summer, which was the major reason behind the surge in imports."
China's domestic supplies appear to be recovering. Statistics from the Ministry of Commerce last week showed that pork prices had fallen for the eighth consecutive week, which illustrates more domestic pork is making its way onto the market. That in turn could soften demand for imported product.
Currently, the wholesale pork price is about 10 percent lower than in September. "With domestic pork prices cooling, imported pork has lost its price advantage. This means that orders for imported pork will see an obvious decline in the rest of this year," Feng says.
Source: The Global TImes