Growing doubts about the state of the Chinese economy could be a “cause for concern” for global pork exporters, according to AHDB Pork.
“Although Chinese economic growth rates have been slowing for some time, the latest concerns have been triggered by a sharp fall in the Shanghai Stock Exchange since mid-June,” said AHDB Pork, adding that with the Chinese government having suspended some share trading, doubts are rising about its ability to manage the economy.
“While the fall in stock values shouldn’t have an immediate impact on the Chinese economy as a whole, it could erode consumer confidence and might directly affect the wealth of some of China’s middle class consumers. As they are among the leading consumers of imported meat, this could be a cause for concern among global pork exporters.”
The AHDB Pork warning comes at a time when many are hoping that higher Chinese demand will support the global trade in the second half of this year. The latest pork quarterly from Rabobank, for example, pinpointed rising pork imports by China as being “crucial to EU prospects” for the second half of 2015.
“Most forecasts had anticipated an increase in Chinese pork imports this year, with some putting shipments at over 1 million tonnes,” said AHDB Pork.
In addition to the current economic concerns starting to “temper expectations” to some extent, there is also a risk that slower economic growth in China may hit consumption levels in the longer-term.
“It is probably too early to say whether this will have an impact on pork imports in the short-term,” concluded AHDB Pork, adding that many exporters will be hoping it doesn’t, given that demand in some other key markets has also begun to cool.
