Drop in Chinese pig herd will impact entire global market – Rabobank
The drop in the Chinese pig herd will impact the entire global pork market from now and into 2016, according to Rabobank.
Chinese pork production for this year is forecast to plummet by 3.7m tonnes (6.5%) to 53m tonnes, it said.
While the Chinese pork industry has experienced one of the biggest culls in history, not everyone is set to lose with as Rabobank said other countries will be able to fill the void.
The EU, US and Canada are best positioned to gain from the extra demand, according to Rabobank’s report ‘China’s Incredible Shrinking Hog Herd’.
Over the past year and a half, it said that China’s pork industry has experienced one of the largest culls on record and the ramifications of this are just being felt now globally.
Rabobank Animal Protein Analyst William Sawyer said that for 2015, Rabobank expects China’s pork production to decline by 6.5%, the third-largest decline in production in the last 40 years.
“This will be supported by a 600,000t increase in imports – primarily from the EU, the US and Canada – in the second half of 2015.
“This surge in pork trade could not come at a better time, as the global pork sector is in the midst of a supply glut after many regions have recovered from the porcine epidemic diarrhoea virus outbreak of 2014, and a number of trade bans have depressed pork prices and producer margins,” he said.
According to the report, a 1.9m tonne Chinese supply gap implies a 600,000t increase of pork and variety meat imports above the 1.3m tonnes imported in 2014.
This export opportunity is very attractive to a sector that has been under pressure in recent times, it said.
Rabobank said that capitalising on the opportunity will require processors and traders who have the right product at a competitive price; who can deliver in the coming months; and who can readily mobilise their supply chain.