TL;DR:
- China’s pork production increased in 2023 due to higher slaughter rates, but the pig population is expected to decrease in 2024 following a decline in the sow herd.
- Pig meat imports fell by 12% in 2023, with Europe losing market share to North and South America, while offal imports rose by 6%.
- Consumer demand shifts towards more affordable cuts amid the economic slowdown, impacting the food service sector and potentially influencing import volumes in 2024.
In 2023, China witnessed a 5% increase in pork production, reaching 57.94 million tonnes, attributed to heightened slaughter activities and an oversupply in the domestic market. This surge in production led to reduced margins for producers and an uptick in culling rates.
However, the outlook for 2024 suggests a contraction in the pig population, estimated at a 6% decline, primarily due to a significant reduction in the sow herd, which has been decreasing by 5-7% year-on-year.
The Ministry of Agriculture and Rural Affairs (MARA) has adjusted its national target for reproductive sows to 39 million heads to stabilise pig production.
Despite these measures, the immediate future points towards tighter domestic pig meat supplies, although there is optimism for gradual production improvements through enhanced farm efficiency and disease control.
The Chinese government remains committed to a 95% pork self-sufficiency goal, encouraging a shift from small to large-scale production and intervening in the market to maintain stability. Live Weight pig prices have been under pressure, averaging 15.41 yuan/kg in 2023, below the production cost, leading to financial losses for producers and an increased market supply that further depresses prices.
Pig meat imports excluding offal decreased by 12% in 2023, marking the lowest annual volume since the African Swine Fever outbreak in 2018.
Conversely, offal imports saw a 6% increase, reflecting a consumer shift towards more affordable meat cuts amidst economic challenges. The EU, while still the largest exporter to China, has seen its market share diminish in favour of Brazil, Canada, and the USA, driven by competitive pricing.
The economic landscape in China is not expected to change significantly shortly, suggesting that the consumption trends observed in 2023 will persist into 2024. This scenario presents an opportunity for increased import volumes, contingent on competitive pricing, as domestic production faces short-term contraction.
