China to increase pork imports
Since June, Chinese pork prices are set to grow as the country's dependence on imports of animal protein is increasing. "By the middle of July, live pig prices across the country were 20% higher than the end of May and 47% higher than year-earlier levels. The price increase indicates that supplies are becoming tighter. This reflects a decline in the pig inventory, which was reported as 26% lower than year-earlier levels in June. Some estimates suggest the decline may be even larger than this, with Rabobank estimating 40% of the herd has been lost," said Bethan Wilkins, AHDB analyst.
During the first half of the year, pork prices in China have been growing constantly but not at a fast pace, suggesting any decline in production was matched by falling demand. Reports suggest that consumers have been switching away from pork in response to safety concerns. Nevertheless, China is still the world's largest market for pork and a severe spike in prices is expected as the country's pig inventory is decreasing. "For 2019 overall, production is still expected to fall significantly though. The latest estimates from Rabobank and the USDA attaché suggest a year-on-year decline of 11-25%. Further declines are expected next year. Some of this increase reflects Chinese speculators purchasing pork in anticipation of rising Chinese pork prices. However, Chinese prices did not rise quite as soon as some expected, and reports suggest this trade has slowed more recently. With prices now on the rise though, import growth is expected to strengthen again, especially in the peak demand period at the end of the year," believes Bethan Wilkins.
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