Large-scale street protests, although localized, have been taking place in Hong Kong for several months, affecting the region’s economy.
Joel Haggard, U.S. Meat Export Federation (USMEF) senior vice president for the Asia Pacific, a longtime resident of Hong Kong, said protesters have been successful in disrupting Hong Kong's public transportation system, often stifling economic activity in the city's main shopping areas.
“You shut down one transportation station, and the whole city is basically paralyzed,” he said.
Haggard relayed that the number of tourists visiting, especially from mainland China, have declined significantly since the protests heightened, which is having a harsh impact on Hong Kong's hotel, restaurant and institutional (HRI) sector, with sales down 30-50%. However, neighborhood supermarkets and taverns have seen brisk activity, as Hong Kong residents are more inclined to eat at home or choose food and beverage outlets closer to home.
What does this mean for the U.S. meat industry?
“Hong Kong is in a technical recession," Haggard said, adding that gross domestic product "will be negative this year. Retail sales in August were off 25%; September was off 18%.”
Haggard noted that while restaurant operators in the area have the highest rents in the world, those rents are coming down. “That’s good, but you don’t have any customers,” he added.
The economic slowdown may be affecting red meat imports to the tune of thousands of tons here and there, but Haggard said there are two much more significant events going on with the Hong Kong meat trade that have nothing to do with the protests.
Traders' ability to re-export from Hong Kong has been in decline for some time, and mainland China's tight hog and pork supplies due to African swine fever are also lowering the volumes of fresh pork entering Hong Kong.
“The supplies of fresh pork into Hong Kong have dropped dramatically,” Haggard said.