November exports of U.S. pork set new records for both volume (259,812 metric tons) and value ($712.7 million), driven in large part by surging demand from China, where the domestic industry continues to struggle with the impact of African swine fever. Joel Haggard, U.S. Meat Export Federation senior vice president for the Asia Pacific, says China's hog prices peaked in November, which further accelerated its already-strong demand for imported pork.
"U.S. exports to the mainland in November continued to show acceleration that started during the second half of the year when Chinese hog prices reached their crest. The sheer volume of trade is astounding and more so when one considers that the U.S. is still handicapped by a 60% import duty disadvantage," Haggard says. "We assume several larger importers have been granted exclusions that have brought those duties down to 37% for them, and now it's 33% because of the most favored nation tariff reduction that China implemented Jan. 1 for all suppliers, but U.S. shipments to China in November were record large and helped push total U.S. exports in November to a record level, both in volume and value terms."
Haggard says improving market access to China is the key to continued success in 2020 as the market has tightened considerably.
"The industry in China is very anxious about what the Phase One U.S.-China trade deal may bring for importers for sure. The number one concern will be import duty relief with U.S. pork prices as low as they are," Haggard says. "From a global perspective, it's been the duties that have most handicapped U.S. sales and left the U.S. with only a 13% market share in China's imported pork 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 important storage infrastructure. Cold storages are bulging, and it looks like traders may have misjudged the velocities that product could be moved out into the marketplace.
"In addition, China just published its December numbers for domestic pork production. They showed a 7% increase in total sow inventories from September. We're still looking at another year of massive imports, but it's definitely a recovery trend."
Source: U.S. Meat Export Federation, which is solely responsible for the information provided, and wholly owns the information. Informa Business Media and all its subsidiaries are not responsible for any of the content contained in this information asset.