Decline in Chinese pig herd could provide import opportunities

The huge reduction in China's hog herd over the last 18 months puts the European Union, the US and Canada in the frame for the predicted increase in imports.

China has culled 100 million head from its hog herd in the last 18 months, and the ramifications for the market will be felt into 2016, according to a Rabobank report, “China’s Incredible Shrinking Hog Herd”.

The bank expects China’s pork production to decline by 6.5 percent in 2015, the third-largest decline in production in the past 40 years. Pork consumption will probably decline, to be replaced by poultry. But there will be an increase in imports, which Rabobank puts at around 600,000 tonnes, primarily from the European Union, the US and Canada.

This could provide an opportunity for “a sector that has been under pressure in recent times”, though as Rabobank says it will require “processors and traders who have the right product at a competitive price; who can deliver in the coming months; and who can readily mobilise their supply chain”.

The contraction in the market does mean “China’s pork supply has been rationalised, with millions of small producers exiting the industry and leaving behind a more modern, efficient and secure producer base.”

Read China’s Incredible Shrinking Hog Herd.