Global pork supply expected to increase further
While China’s pork imports have slowed down recently, they are likely to pick up again later this year, according to RaboResearch’s latest global Pork Quarterly.
“The most significant story in global pork markets has been the substantial decline in China’s imports in recent months, which creates a risk of over-supplied global markets,” says Chenjun Pan, RaboResearch Senior Analyst – Animal Protein.
“However, we do expect China’s imports to pick up somewhat over the rest of the year.” While the Rabobank Five-Nation Hog Price Index suggests a stronger pricing trend, the major importing countries will likely maintain steady import growth.
China’s pork farming structure has been impacted by stricter environmental policy enforcement.
Despite the exit of many small farms, we maintain our forecast for 2017, with production increasing by 2%.
Prices will continue the downward trend, after holding at strong levels in summer. Pork imports were down by 27% in the first eight months, but may rebound over Q4 2017.
China’s import demand has been one area of distortion in global pork markets over the past one to two years, and a diversion in prices for certain cuts has been another.
“Pork bellies have reached record levels in the US and some other markets, driven by strong demand, especially from foodservice,” says Justin Sherrard, RaboResearch Global Strategist – Animal Protein. ■