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Wednesday, July 29, 2015
Rabobank forecasts boost to global pig meat trade
During the second quarter of 2015, there were signs of recovery in the global pork market, according to the latest quarterly report on the state of the industry from Rabobank.
The recovery was attributed to upwards movement in prices in most of the countries participating in global trade in pork, particularly in the U.S., Canada and China, as the result of a limited increase in supply.
As its domestic pig population has been declining recently, Chinese demand from imported pork is expected to expand during the rest of this year and on into 2016.
“The main questions are when Chinese import growth will start, how much volume growth there will be and what the support for pork prices will be across the globe,” commented Albert Vernooij, Rabobank’s animal protein analyst.
There is some doubt over the prospects for the U.S., according to the report. If significant growth can be achieved in exports to China for the rest of this year, the improvement in margins during the second quarter of 2015 could continue despite the up-tick in production.
Lower production resulting from recent disease outbreaks in Mexico and South Korea are forecast to fuel further global pork trade.
By contrast to the other regions, pig meat production is flat in the European Union and Japan, according to Rabobank, which highlights the opportunities for improved prices and margins for the European pig sector.
Role of China in global pig meat supply
With China accounting for around half of the world’s pigs, it is no surprise that developments in the sector there have huge implications for the global picture.
Recently published, the OECD-FAO Agricultural Outlook 2015-2024 report projects that total meat production is projected to expand around 51 million tons by the end of the outlook period, and that Brazil and China will be the main contributors to this increase.
For pork, China easily heads the league table with an expected increase in output of more than 6.3 million tons by 2024 from the base level in 2012-14., while second placed U.S. increases production by 1.26 million tons. These are followed by the Russian Federation, Brazil and Vietnam, each expected to boost output by between 800,000 and 900,000 tons over the same period.
Jackie Linden is a contributing writer for WATTAgNet.