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WH Group predicts lower US exports to China in second half of year

Iain HoeyBy Iain HoeyAugust 13, 20202 Mins Read
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China’s WH Group expects pork exports from the United States to China to fall in the second half, the group’s chief financial officer Guo Lijun said, as the coronavirus pandemic hit volumes being handled at U.S. processing plants and pushed up prices, according to a report from Reuters.

A high numbers of Covid-19 cases in US slaughter plants has impacted processing capacity and raised costs, including at WH Group-owned Smithfield Foods. Five of the firm’s plants are still running below normal capacity, Lijun told reporters after the company reported a 20.9% jump in first-half profits.

He added that the continuing spread of the virus would continue to impact the slaughter business and pressure hog prices.

Higher prices for packaged meats in China and Europe offset weak prices and sales volumes in the United States, where packaged meat revenues fell 9% to $3.4 billion and operating profit in the segment dropped 45.5%.

The group’s first-half profit totalled $550m, compared with $463m a year earlier, while revenues rose 12.2% to $12.5bn.

High prices, which are an ongoing result of the epidemic of African swine fever which devastated China’s hog herd last year, boosted fresh pork revenues in China by 56.9%, even as the number of hogs slaughtered plunged 62% to 3.27 million head.

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Iain Hoey

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