Global Porkmeat Market

Among the major pork producers are China (which covers practically a half of world production), the countries of the European Community, the USA, Brazil, Russia, Vietnam, Canada, Japan, the Philippines, Mexico, and South Korea. On the whole, pork production has increased for 8% over the last 5 years (from 2007 till 2011), but among the 12 leading countries the highest development indices were demonstrated by Russia (+20%), China (+15%), Brazil (+8%), and Vietnam (+7%). Moreover, pork production has reduced in South Korea (-20%) and in the countries of the European Community (-1%).

Figure 1. Geography of pork production in different countries of the world, the year of 2011, %

Following the results of 2011, the volume of pork production in the world amounted to 101 thousand tons which is lower for 2% than in the previous year when the historical peak of porkmeat production was reached (in slaughter weight). The volume of world pork production was reduced due to a decrease in Asian production (Asia provides about 65% of the world total pig population). The outbreaks of disease at the end of 2010 annihilated large pig herds in China and South Korea which led to a loss of production and practically 60% rises in prices for pork in these countries. The Chinese government had to restore subsidies for the biggest pig farming enterprises and to unload huge stocks of pork onto the market in order to put down a leap of food inflation. In 2012 we anticipate a 4% increase in Chinese pork production, though a complete recovery of stocks is unlikely to happen in 2012. Expansion of production in small farms which still form the basis of the Chinese hog and pig farming industry is constrained by considerable expenditures connected with eatables and the persistent risk of diseases. Big farms in turn face a range of problems connected with shortage of land necessary for further expansion of production.

In South Korea the outbreaks of pig diseases have even more severe consequences. Thus, last year pork production ran down for 25% because practically 1/3 part of the pig population had been lost on the back of the foot-and-mouth disease outbreak. However, in 2012 a 21% increase in production is expected which will be supported by rises in prices for both pigs and their meat encouraging producers to raise the output. The pig population is rapidly recovering, and by estimate at the end of 2011 it may amount to 98% of the level preceding the foot-and-mouth disease. Nevertheless, the volumes of pork stocks are unlikely to come back to the former level. The production is constrained by new rules which establish minimal areas for pig houses and environmental standards. Besides, the EU - South Korea Free Trade Agreement which became valid in July, 2011 added to marketability of European pork in the South Korean market, and this exerted a definite pressure on Korean producers.

THE HIGHER DEMAND FOR IMPORTED MEAT ON THE PART OF ASIAN COUNTRIES FOSTERED THE GROWTH OF INTERNATIONAL PORK TRADE. THE IMPORTS OF PORK HAVE INCREASED FOR 7%, THUS EXCEEDING 1.21 MILLION TONS.

In Japan a 7% loss of pork production was registered; that was explained by decrease in a pig crop in radiation-exposed areas in combination with reduction of the number of pig farming enterprises for 13% over the last 3 years.

In South America a 20% cut of pork prices in Brazil and winding-up of some farms after introduction of the restrictions on the export led to curbing of pork production in the region and to the output increase only for 1%. However, high prices for beef in most countries of the region which is characterised by a high consumption of beef create good opportunities for accretion of the consumer demand for pork, and in particular among the growing middle class.

In the more developed markets pig-breeding has been characterised by stagnation of production and commercial business over the extended period which is connected with high prices for eatables. In the USA and Canada there is a growing efficiency of sows which will undoubtedly affect an increase in pork production in these countries in the coming years, especially if prices for eatables are cut. In the countries of the European Community stagnation of production in the pig-breeding sector affects the decline in profitability.

 

Thus, the higher demand for imported meat on the part of Asian countries fostered the growth of international pork trade. The imports of pork have increased for 7%, thus exceeding 1.21 million tons. The biggest growth of import pork supplies in comparison with 2010 was registered in South Korea (for almost 64%) where the biggest part of the pig population was lost because of the foot-and-mouth disease outbreak, and in China (+32.5%) where the increase in imports has become a necessary governmental measure to force down the food inflation.

Figure 2. Geography of pork imports in different countries of the world, the year of 2011, %

The leading world exporter of pork is the United States of America which covered 34% in 2011. Practically a half of the supplies (about 45%) are delivered to Japan. Then Mexico and Canada go. Export plays a significant role in the pork market of the USA, it holds about 22% of the domestic production. As the U.S. Department of Agriculture anticipates, in 2012 the export supplies of pork from the USA will increase for 2% reaching the level of 2.3 million tons. This will be favoured by expansion of meat deliveries to China and Mexico.

The second place in the world supplies of pork is occupied by the European Union with a fraction of 30%. Then Brazil, China, and Chili follow.

It is expected that in 2012 exports of pork from the European Union countries will reduce for 5%. Notably we anticipate that the deliveries of pork to Russia will decrease due to abatement of import quotas.

The exports are expected to decrease in Brazil as well on the back of the ongoing prohibition (introduced in 2011) against the pork deliveries to Russia from three Brazilian states. However, Brazil is going to increase the supplies of meat to Hong Kong, Argentina and other countries.

Figure 3. Geography of pork exports in different countries of the world, the year of 2011, %