Market access, ASF cause shifts in global pork trade in 2019

Hindered by retaliatory duties in China and Mexico, the United States was the only major exporter to ship less pork in the first half of 2019.


Source: U.S. Meat Export Federation (USMEF)

via National Hog Farmer - Sep 11, 2019


The worldís leading exporters of pork and pork variety meat shipped 8% more in the first half of 2019 compared to the same period last year. A surge in European pork shipments to China/Hong Kong accounted for most of this growth, as Chinaís African swine fever-related pork deficit has intensified. The European Union saw a 13% increase in total first-half exports to 1.95 million metric tons, while Brazilís exports increased by 25% to 342,000 mt. Canadaís first-half exports edged 2% higher to 598,000 mt, but China was its only growth driver and Canadian pork lost access to China near the end of June. Chileís exports increased 12% to 110,250 mt, with growth also driven by China.


Hindered by retaliatory duties in China and Mexico, the United States was the only major exporter to ship less pork in the first half of 2019, with exports falling 2% in volume to 1.25 million mt. But with Mexicoís 20% retaliatory duty being lifted in late May, U.S. exports finished the first half on a strong note as June shipments increased 11% year-over-year to 212,887 mt (a full summary of first-half U.S. exports is available online). U.S. exports gained even more momentum in July, setting new monthly records for both volume (233,242 mt, up 32% year-over-year) and value ($623.3 million, up 34%). A full July summary can be found here.†


The EUís first-half exports to China/Hong Kong climbed 28% from a year ago to 1.02 million mt, while exports to the rest of the world (930,713 mt, up 1%) were relatively steady with 2018ís pace. The European industry began to capitalize on improved access through the EU-Japan Economic Partnership Agreement, as exports to Japan increased 4% to 203,141 mt. EU exports also trended higher year-over-year to Australia (45,786 mt, up 17%), Vietnam (41,713 mt, up 39%) and Taiwan (28,057 mt, up 11%), while exports were lower to South Korea (147,106 mt, down 10%), the United States (67,522 mt, down 17%), Singapore (17,633 mt, down 11%) and South Africa (15,192 mt, down 15%).


The European industry also received a lift from Chinaís large imports of pig fat, which surged to 56,000 mt in the first half of 2019. This was up from just 4,400 mt in the same period last year and well above the 38,054 mt imported in the first half of 2017. The EU accounted for 79% (44,411 mt) of Chinaís fat imports while Canada (7,858 mt) was the other major supplier. When Russia closed to European pork in January 2014, one of the biggest hits was to pig fat. Although first-half EU fat exports were up 43% year-over-year to 139,595 mt, shipments were still well below the levels exported before the Russia closure (by comparison, EU exports were 178,000 mt in the first half of 2013).


The European Commission expects EU pork production to increase by 0.3% this year to a record 24.19 million mt, and further growth of 1.4% is expected in 2020. Exports are forecast to rise 12% this year and next year, while domestic EU pork consumption is expected to contract by 1.4% (32.1 kilograms per capita) and fall slightly again in 2020 as exports account for a larger share of production.


Chinaís strong demand has underpinned higher EU prices and is thus driving expansion where possible, although the threat of ASF continues to hang over the major pork-producing and exporting EU member states.


Brazilís first-half exports to China were up 29% year-over-year to 92,192 mt, while exports to Hong Kong slowed 2% to 78,046 mt. This resulted in combined China/Hong Kong total of 170,237 mt, up 12%. Exports to Russia, which took about 40% of Brazilís pork exports before closing to Brazilian pork near the end of 2017, totaled just 26,170 mt ó about one-fifth of the pre-suspension volume. Brazilís exports increased to Uruguay, Chile, Singapore, Angola, Georgia and Vietnam (7,239 mt, up from just 818 mt last year). Though volumes were small, Brazil also exported more pork to the United States (3,439 mt, +154%) and Korea (2,352 mt, +295%).

While Canadaís first-half exports edged up 2% from a year ago its reliance on China (211,968 mt, up 47%) presents a troubling outlook for the second half unless China lifts its suspension on imports of Canadian pork. Canadaís first-half exports to the United States, which is in a period of record production, were down 17% to 131,343 mt. Despite tariff relief from the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, first-half exports to Japan dropped slightly (116,430 mt, down 2%) and exports to Mexico were steady (56,980 mt) despite having a tariff advantage over U.S. pork from January through late-May...


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