INTL FCStone: It Could Take Seven Years for Chinese Pork Production to Climb Back Above 50 MMT

Posted on 08/26/2019 2:18 PM

Chinese pork imports will likely surge to 3.3 MMT this year and to 4.2 MMT in 2020, with the latter total doubling 2018’s 2.1 MMT shipments of the meat, forecasts the broker and consultancy INTL FCStone, as African swine fever has decimated China’s hog herd. The firm details that it expects China’s pork production to slide 29.6% in 2019 to 38 MMT, with production dropping to 34 MMT in 2020, a 20 MMT (37.0%) plunge from 2018 levels.

Clearly, this will continue to impact China’s feed use. FCStone projects that if pork production in China falls as much as 40%, consumption of animal feed would plummet nearly 37 MMT a year.

It could take China up to seven years to return production to the 50 MMT mark, forecasts Renato Rasmussen, FCStone’s market intelligence director in Brazil. He says Chinese tariffs on U.S. pork will likely limit American shipments to Beijing. Just last week, China announced tariffs will rise another 10% on U.S. pork from Sept. 1, pushing the total tariff to 72%.

But the European Union, Brazil and other Asian nations like Japan and South Korea should see an uptick in shipments to China, according to Rasmussen. He also noted that beef trade could also benefit as “it would be a more natural transition for Chinese consumers to opt for beef than poultry.”

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