By Todd Patrick :: October 22, 2019
Pork prices are on the rise after African Swine Fever hit hog farms across China and wiped out one-third of their pigs. This caused China to begin furiously importing proteins from around the world to cover the demand in their nation. Despite bringing in more protein imports, the prices of pork products are expected to soar due to demand. Analysts expect the prices to surpass the record high of 2016 in the fourth quarter of 2019.
With a 30% decline in available supplies, and a national herd in turmoil, other protein sources, including chicken and beef will likely become more expensive and more important in China. So far, Brazil has seen a 31% bump in exports of chicken to China. The total import quantity of pork to China this year will likely exceed 3 million tons. However other protein sources come with considerations in China. Should interest turn to chicken as a replacement protein, bird flu is expected to rise.
Given that China is the world leading consumer and supplier of pork products, the shortage should have been a win for US hog farmers, but the battle of tariffs has kept them mostly out of the market, forcing them to watch South American and European farmers sell off to China. With fewer pigs to feed, analysts expect China to buy fewer soybeans for feed, further complicated the precarious trade position of the US and China. Soybeans are a bedrock issue of the negotiations between the US and China.
However, things appear to be improving between the US and China as the increase in tariffs on the first three lists of Section 301 duties was indefinitely postponed by the US in good faith after trade negotiations started to improve. China is planning on increasing their purchases of US agriculture products, but few specifics have been released as trade talks continue. It would be of great benefit for both nations to alleviate the deficit of pork in China while depleting the surplus of soybeans in the US, if such a solution can be achieved.
If you’re working on shipping pork or agriculture products, we encourage you to discuss your logistics plan with CFI. Our perishable shipments, wealth of resources and international network can move your cargo wherever you need it to go!