Meat production boosts China’s agri sector

By Carina Perkins

- Last updated on GMT

Meat production is boosting China's agricultural output
Meat production is boosting China's agricultural output

Related tags: Livestock, Meat, Pork

Meat is helping to drive growth in China’s agricultural strength, according to a new report from Business Monitor International (BMI).

The report revealed that China’s pork production is set to grow 20.2% by 2016/17 to 62.9m tonnes. It added that production growth had been encouraged by higher local livestock prices, with “availability of vaccinations and the ongoing commercialisation of the industry”​ likely to boost output in the next few years.

It said there was also strong production growth potential for sugar and dairy products, with China’s total agribusiness market value estimated at US$537.5m in 2013 and forecast to grow an average of 3.2% annually between 2013 and 2017.

“China’s weight in the global agricultural sector is growing, with the country having an increasing role in international production balances and prices,”​ stated the report, adding that “high demand growth, strong government support and potential for investment”​ in the meat, dairy and sugar industries should help them “outperform”​ in the coming years.

Consumption of key commodities is also expected to remain strong, with soy consumption set to grow 23.3% to 88.7m tonnes on the back of increased meat consumption and strong demand for soybean meal from the livestock sector, the report stated.

Challenging time

However, the report admitted that China’s agribusiness sector faced “challenging times”​ as a result of a slowdown in GDP growth, dwindling consumer confidence in food safety, rising prices for food ingredients and labour costs and stricter bank loan requirements for smaller enterprises.

“This is best seen in the mild pork-production forecast for 2012/13, as producers reduce pig herd expansion on the back of low profitability,”​ it said.

It added that the China’s recent avian influenza outbreak could drag down livestock production prospects over the next few years.

“We believe the amount of affected poultry farms could be largely underestimated, as infected birds with the H7N9 virus show no obvious symptoms and are able to silently spread the disease – making it difficult to locate affected farms,”​ stated the report.

“Even if the virus is quickly contained, lower consumer confidence in poultry products is anyway likely to reduce poultry meat consumption, inciting farmers to reduce headcounts.”

Related topics: Meat

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