EU pork exports braced for fall in demand from China

Europe's beleaguered pig meat market has seen prices fall to their lowest levels in a decade, however the industry has recently been capitalising on exports to China, which was hit by a significant drop in its breeding herd leading to a tightening of supply and rise in domestic prices. As incomes have increased in China, the amount of pork eaten has soared; China now accounts for half the world's consumption. However, a report today from Global Meat News says there are warning signs that China's economic slowdown is impacting the EU pork industry, which is bracing for a drop in exports, "We would expect the Chinese slowdown to have some impact on EU exports, but the size of this is too early to quantify", says AHDB Pork analysts, Vikki Campbell.

China’s economy grew by 6.9% in 2015, compared with 7.3% in 2014, making it the country’s lowest level of growth in 25 years. This slowdown in one of the world’s juggernaut economies has caused concern for world markets, and there are worrying signs for the EU pork sector.

Pork exports to China rose by 508,000 tonnes (t) in 2014, to 682,000t up to November 2015, according to AHDB Pork’s market trends report. It suggested that Europe’s beleaguered pig meat market had been able to rely on exporting pork to China to offset the declining European pig price, now at its lowest level in a decade.

‘Too early to quantify’​

But because China’s economy is looking in its worst shape for a quarter of a century, there is a belief that the purchasing power of China could hit EU pork exports.

“It is too early to predict the size of the impact this will have on the EU pig market,”​ AHDB Pork senior analyst Vikki Campbell said.

“Recent export figures from member states – October through to December – suggest that export numbers are still increasing. Historically there is a slowdown in pork exports in January following the Chinese New Year, so it remains to be seen how EU exports fare after this.​

“We would expect the Chinese slowdown to have some impact on EU exports, but the size of this is too early to quantify.”​