Reducing pork imports to China contributes to lower world prices

Bloomberg predicts a sharp drop in China 's record pork imports . According to experts, this will reduce pressure on the global meat market and lead to a decrease in prices on a global scale - at least for food products in one category.

In July-December, the world's largest importer of animal protein sources may reduce pork imports by more than 50% compared to the first half of 2021, because it becomes cheaper to buy pork from domestic producers than from external suppliers. This was stated by the head of an independent analytical center for trade between China and the United States in Chicago, Jim Huang.

Pork futures in Chicago are up more than 25% this year due to rising demand and sharp price increases. By contrast, pork prices in China have fallen by more than 50% as stocks recover from African swine fever outbreaks and domestic supply rises. American pork is now more expensive than meat from Chinese suppliers, so it is more profitable for the government to buy meat from them to replenish the state reserve.

Analysts believe that this trend is good news for consumers all over the world. Rising production costs for meat, grains and vegetable oil sent food prices spiraling to their highest level since 2011 and fueling inflation amid the COVID-19 pandemic .

In the first half of 2021, domestic pork production in China increased by 36% year-on-year to about 27 million tons, and the number of pigs increased by 30% to 439 million units, as of the end of June.

For all of 2020, China imported 4.4 million tons of pork, twice as much as in 2019. In January-May of this year, purchases of this type of meat outside the metropolis were 14% higher than last year. Spain, Brazil and the USA became the main suppliers.

Lower domestic prices have led the Chinese government to cut overseas pork purchases in favor of Chinese producers, said Lin Guofa, senior analyst at consulting firm Bric Agriculture Group. Last week, Beijing purchased 13,000 tons of pork from the domestic market, and a week earlier - 17,000 tons. And for the first time since the beginning of the year, prices on the food market in June decreased by 124.6 points (-2.5% compared to May).

At the beginning of the year, the Chinese government released pork from the state reserve in order to stabilize the situation in the domestic market after the ASF epidemic. Last year, 670,000 tons of frozen meat were extracted from stocks, which is equivalent to 15% of imports. Unlike beef, China's pork imports will decline in the second half of 2021, Bric Agriculture Group predicts.

And this fact will be taken into account when preparing the monthly analytical report Meatinfo.ru