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China’s Demand for Pork Increasing

8 October 2012, at 12:22pm

CHINA - If current trends in China’s pork production and industrialisation continue, corn imports could approach 20 million tonnes per year within a five-year time frame, according to a new study from Rabobank Food & Agribusiness Research and Advisory.

This is one of the changes in the landscape of China’s pork industry that will have major reverberations on world markets.

The pace and success of the industrialisation that is rapidly taking place across China’s pork sector will be a major determinant to whether China will move back towards self-sufficiency or become an even bigger importer. If China could improve its corn yields and swine feed conversions ratios towards US levels then goals of self sufficiency are achievable.

If China does not have to import pork, it will need to import corn, and if current trends in China’s pork production and industrialisation continue, corn imports would rise significantly.

China has recently been importing over 0.4 million tonnes of pork per year, in a world market with trade of less than seven million tonnes per year. In Rabobank’s view, China is likely to continue to be an importer of both pork and corn for the foreseeable future, but how much of each will depend on improvements in the supply chain. China’s pork supply chain is in transition period, shifting from traditional household farming to modern commercial systems. While both farms and processing plants are growing rapidly in size, co-ordination between the two remains undeveloped. The pork supply chain is still based on the spot market in most cases.

China’s chances for self sufficiency in pork is boosted by its great potential for improvement in hog productivity and a strong consumer preference for fresh meat. It also has a lack of comparative advantage in land intensive agriculture (e.g for growing corn), so it should import this type of commodity rather than producing, and focus on areas such as pork production. However, challenges in achieving success in pork production include the continuation of disease problems, food safety issues, logistics and the lack of a cold chain.