Positive outlook for China’s pork output

By RJ Whitehead

- Last updated on GMT

Related tags: Meat, Influenza, Supply and demand, Rabobank

Positive outlook for China’s pork output
China’s pork industry looks like it’s moving in a positive direction over the rest of this year, and as far as 2014, according to Rabobank research.

Limited supply growth, a likely increase in demand towards the festival season and continuing high beef and poultry prices will benefit the pork market, the agri-focused bank predicts. 

However, world prices will be limited by high stock levels as a result of a disappointing first-half of the current year, although this is mainly an issue for the developed world.

Accounting for losses

With declining feed costs resulting from bumper harvests, a subdued price increase will support much needed margin recovery across the globe​,” explained the report’s author, Rabobank analyst Albert Vernooij. “However, due to the slowness of both the increase of pig prices and the decline of feed costs, it is questionable whether this will be enough to fully cover losses endured in the first-half of this year​.”

The Rabobank five-nation finished hog price index rebounded in the second half of the second-quarter, supported by improving conditions across the globe with limited impact of exchange rates. 

In the European Union, the situation is forecast to remain difficult, with continuing pressure on consumer demand hampering market recovery despite lower supply and rising exports.

Impact of bird flu​ 

However, prices recovered in China, supported by the outbreak of H7N9 avian influenza in poultry, which resulted in a consumer move to pork. In the United States prices have also recovered, following the loss of key export markets, due to an increase in seasonal demand and lower-than-expected supplies.

The expectations for the second-half of this year are largely dependent on the prospects for demand as production is forecast to slightly increase. Pork markets are benefiting from relatively high prices for both beef and poultry, but will be negatively influenced by the continuing difficult economic conditions in key markets. 

Rabobank expects a slight increase in overall global pork consumption in the second-half, due in part to the start of the festival season in China. This will support rising prices, but will likely be limited due to the current large stocks across the globe.

In the longer term, Rabobank believes the announced acquisition of US-based Smithfield by Chinese Shuanghui International highlights the increased importance of global trade for the pork industry. 

The limited number of relevant countries, demand growth, grain deficits in Asia, and continuing volatility mean that the Smithfield takeover may be a trigger for future steps. In order to secure supply, other importers may look to follow suit.

Related topics: Markets, East Asia, Industry growth, Meat, China

Related news

Show more

Related products

Plant-based alternatives to thrill your tastebuds

Plant-based alternatives to thrill your tastebuds

Tereos Starch & Sweeteners Europe | 25-May-2018 | Technical / White Paper

Tereos has launched a range of delicious, 100% plant-based solutions for the food industry. Sauté Végétal is the first example of this new range of high-protein...

Gain profits and sustainability in food production

Gain profits and sustainability in food production

Dassault Systems Ltd | 06-Sep-2017 | Technical / White Paper

The challenge of feeding the world is forcing food producers to stretch their supply chains across continents, which comes at the expense of resources...

Related suppliers

Follow us

Featured Events

View more

Products

View more

Webinars

Food & Beverage Trailblazers

F&B Trailblazers Podcast