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China's record meat imports not without challenges

Improving market access key to continued success as market has tightened considerably.

U.S. meat exports to China during November showed continued acceleration that started during the second half of 2019, but the growth does not come without challenges, according to the U.S. Meat Export Federation (USMEF).

“The sheer volume is astounding, and more so when one considers that the U.S. is still handicapped by a 60% import duty disadvantage,” said Joel Haggard, USMEF senior vice president for the Asia Pacific. “We assume that several larger importers have been granted exclusions that have brought those duties down to 37%, and now, it’s 33% because of the most-favored nation tariff reduction that China implemented Jan. 1 for all suppliers.”

USMEF said U.S. shipments to China were record large and helped push total U.S. exports in November to a record level in both volume and value.

According to newly released data from China’s General Administration of Customs, pork imports in 2019 rose sharply by 75% year over year to 2.11 million metric tons as the country dealt with an African swine fever outbreak that decimated more than half of its domestic hog herd. However, data showed that beef imports also saw a sharp increase, up 59.7% to 1.66 million metric tons.

Still, improving market access is the key to continued success in the region as the market has tightened considerably, USMEF noted.

“The industry in China is very anxious about what the phase one U.S.-China trade deal may bring,” Haggard said. “For importers for sure, the number-one concern would be import duty relief.”

With U.S. pork prices as low as they are from a global perspective, Haggard explained that the duties have mostly handicapped the U.S. sales and left the U.S. with only 13% market share in China’s pork import market.

“In China right now, it’s not all that positive if you are an importer. China’s total imports of all meat and poultry during November were also record large, and this appears to have strained import and storage infrastructure. Cold storages are bulging; it looks like traders may have misjudged the velocities that product could be moved out into the marketplace,” he relayed.

Additionally, China recently published its December numbers for domestic pork production, which USMEF said revealed a 7% increase in total sow inventories from September.

“You’re still looking at another year of massive imports, but it’s definitely a recovery trend,” Haggard said.

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