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Chinese pork market conditions dominate international red meat discussion

Iain HoeyBy Iain HoeyDecember 9, 20212 Mins Read
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The fluctuating Chinese pork market has dominated conversations surrounding the international red meat trade, according to market commentary from Quality Meat Scotland (QMS).

Between spring and autumn 2021, Chinese pork market conditions proved unstable as by late August, wholesale pork prices had fallen below the pre-African Swine Fever levels of 2019, and after China’s holiday period in October, they slipped below 18 yuan/kg, down over 60% from January, senior economics analyst, Iain Macdonald explained.

He noted, however, that things quickly changed again in October as wholesale pork prices jumped 35% in five weeks before closing November at around 18% above the 2016-18 average, at 24.5 yuan/kg (£2.90/kg).

“It is likely that the market quickly became under-supplied as a result of local production rebalancing lower after the liquidation cycle plus the reduction in imports,” said Mr McDonald.

He also pointed out that whilst while beef and lamb wholesale prices were pulled higher by the protein shortages of 2019 and 2020, they did not readjust significantly lower again in 2021 in line with pork.

“It seems likely that reduced pork availability in 2019-20 led Chinese consumers to try alternative proteins more often, giving some degree of permanence to the lift in demand for beef and sheep meat, while pork demand may not have fully recovered.  Indeed, the USDA projects that pork consumption will remain 10% below 2016-18 levels this year and by 13% in 2022,” explained Macdonald.

Currently, the USDA is forecasting pork imports to China will to fall 15% this year before partially recovering in 2022, up 6%, beyond which , China’s pork import requirements are expected to remain elevated at nearly three times their 2016-18 average.

“The volatility in the Chinese market in recent years demonstrates how quickly global markets can shift, causing large knock-on effects which are difficult to plan for,” said Mr Macdonald.

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Iain Hoey

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