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The extent of the African swine fever (ASF) problem in China, more than anything, is the driver in the first fall in global meat production in 20 years.
The surge in demand from China for imports to meet some of this deficit means that Bord Bia will be pushing an open door when it delivers the Chinese part of its €3.82m promotion campaign for EU pig and poultry meat that also includes Mexico.
With the Food and Agriculture Organisation (FAO) of the United Nations identifying a drop in Chinese pig meat production of 20% this year and the Chinese pig herd expected to be half in 2020 that it was in 2018, there will be serious import demand for all meat to offset the loss in domestic production.
ASF impact on domestic prices
The impact of ASF, which was identified over a year ago in the Chinese pig herd, is only now being reflected in the market because China had huge reserves of meat in stock.
With much of this now used, scarcity of supply is now being reflected in the dramatic rise of Chinese pigmeat prices.
In the last month, live pig prices have jumped 30% to CNY37.65/kg (€4.87/kg) and the wholesale price of carcase sides is now almost CNY50/kg (€6.47/kg), which is double the price from August this year (information supplied by Bord Bia’s China office).
This is what is driving the huge demand currently from China for imports of all types of meat.
Suppliers of pigmeat to China
The EU is China’s biggest supplier of imported pigmeat and offal, supplying just under two-thirds of their total imports in 2019 up to end of September.
While it is Ireland’s second-most important export market for pigmeat, we supply just 3% of total Chinese imports.
The biggest supplier this year is Spain with 17% of Chinese imports, followed by Germany with 16%. Denmark and the Netherlands both have a 9% share of the market, followed by France with 5% and the UK with 4%.
Canada has been banned since June, though this has just been lifted, and it will still account for 12% of China’s imports this year.
The USA has had huge retaliatory tariffs applied to its pigmeat because of the ongoing trade dispute and yet it still represents 13% of China’s pigmeat and offal imports.
Unlike beef, South America is a minor supplier of pigmeat and offal to China, with Brazil supplying 7% and Chile supply 4%.
At first glance, Irish farmers might question whether Bord Bia should be involved in a campaign that isn’t about exclusively promoting Irish produce.
However, in China, there is little recognition of Ireland or other smaller EU countries, but there is strong recognition of the EU itself.
By delivering an EU programme of which Irish exports will benefit means that Bord Bia, in general, is identified with a programme that is bigger and beyond anything that Ireland could do on its own.
Even though it is our second-biggest export market, we have supplied just 3% of China's import requirement for pigmeat and offal in 2019 so far.
China will be a buoyant market to sell into, not just for pig and poultry meat, but all meats, given the growing demand and disruption to domestic Chinese supply.
In this context, anything that puts Bord Bia, and by association the Irish food industry, to the forefront of EU exports can only have a positive effect on the positioning of Irish produce in this market.
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