African Swine Fever (ASF) has spread across the Chinese pig herd throughout the past year, causing a huge reduction in domestic Chinese pig meat supply.

The pig cull and stock reserves maintained supply into this year, despite ASF being a problem since this time last year.

However, it is expected that demand for pigmeat imports will grow further in the second half of this year, as exports for the first half at 819,000t are up on last year when the total imports for the year were 1.4m tonnes.

Increase in Imports

In the first half of this year, almost two-thirds (63%) of Chinese pigmeat imports have been supplied by EU countries.

Spain supplied 17%, Germany 16%, the Netherlands and Denmark did 9% each, while France, on 5%, and the UK, on 4%, are also ahead of Ireland on 3%.

The USA sent 10% of Chinese imports in the first half of 2019 and Canada supplied 16%.

Problems with US and Canada

However, there are problems for both countries.

The US is embroiled in a trade dispute with China that has made US imports much more expensive, with retaliatory tariffs applied by the Chinese government, resulting in Chinese importers becoming reluctant to do business with USA companies.

Canada’s exports of pigmeat were suspended on 26 June because the Chinese authorities reported finding ractopamine residues in Canadian pigmeat and false veterinary certificates.

Domestic pressure

With the pressure on domestic supplies because of ASF and trading relationship difficulties with the US and Canada, who between them supplied one quarter of Chinese imports so far this year, there should be further opportunity for EU exporters, including Ireland.

However, Argentina has joined the market, with three exporting plants approved by China in April, so it will join Brazil from South America, which supplied 6% of China’s pigmeat imports in the first half of this year.

Prices

Prices for pigmeat are also on the increase in China.

Live pig prices were CNY19.32/kg (€2.44/kg) at 5 August, an almost 13% rise on the previous month.

Piglet prices are CNY43/kg (€5.44/kg), up 7% during July, while the wholesale price for pork sides is also on the increase at CNY27/kg (€3.42/kg).

After being insulated from price increases until now, retail prices jumped 20% in July for pigmeat.

The impact of China using its pigmeat reserves and trading difficulties with its North American suppliers has to be an opportunity for the EU, Ireland included.

Pigmeat prices in Ireland were €1.74/kg for week ending 6 August, but with prices increasing on the continent, there is an expectation among pig producers in Ireland that prices will move up, with €1.80/kg the immediate ambition.