First half of 2020 review: China's rapid change under the new crown outbreak.

China's pork import market rose in the first half of 2020, following an upward trend in 2019.
Despite the spread of the COVID-19 epidemic and the subsequent weak demand for pork, particularly in the food services sector, China imported 2,074,128 tonnes of pork and 656,344 tonnes of pork from January to June this year, with total visceral volumes increasing by 153.3 per cent and 33.2 per cent year-on-year, respectively.
demand for pork does not seem to have cast a shadow over China's pork import market at all.
pork imports in the first six months of this year have exceeded the levels for the whole of 2019.
this may be due to the impact of ASF, the collapse in pork production in the first half of 2020 and relatively low pork prices in overseas markets over the same period.
pork import market performed well in the first half of 2020, as shown in the chart below, and china's pork imports have remained high for the first six months of this year.
in March and April this year, year-on-year growth reached 201.9 per cent and 185.6 per cent, respectively, to 384,015 tonnes and 389,891 tonnes.
, the main growth driver is the huge supply gap for domestic pork.
pork production in China fell 21.3 per cent to 42.55 million tonnes in 2019 due to the negative impact of ASF.
recovery from pork production remains slow until the first half of 2020.
the first six months of this year, domestic pork production continued to show a downward trend, down 19.1% year-on-year to 19.98 million tons.
, expectations of future supply-demand imbalances have spurred Chinese pork importers to buy and stock more pork from overseas markets than in previous years.
customs only published total imports in January 2020 and February 2020, so the two-month figures in the chart are average.
, U.S. pork exports to China grew rapidly from January to June, another important driver of a surge in Chinese pork imports.
period, China imported 407,896 tons of pork and 130,061 tons of pork from the United States, up 503.3 percent and 85.6 percent year-on-year, respectively.
in terms of product mix, the blowout in the pork import market since October last year has been driven mainly by pork segments (e.g., shoulders, legs, abdomens and collars), followed by visceral products.
the main reason is that China had been a major destination for visceral products until the ASF outbreak, and that more pork products had shifted from European and Southeast Asian markets, such as Japan and South Korea, to Chinese pork prices because of China's huge supply gap and expected surge.
performance of global pork exports to China: the fierce zero-sum game is essentially a chasing game for China's global pork exporters and will intensify in the first half of 2020.
biggest winner is the U.S., despite its pork industry struggling with internal COVID-19 and external trade wars.
addition to maintaining its championship on pork chop, the U.S. has regained market share in pork minced meat from other exporters and returned to first place.
increase is mainly due to the fact that since last October, a growing number of U.S. pork producers have been required to remove lekdopamine to meet stricter Chinese regulations.
, more factories have been eligible to export pork to China since then.
dozens of meat processing plants were shut down in the wake of the COVID-19 outbreak in the United States, when more than 3,000 workers ben sickened, reducing the processing capacity of U.S. pork and beef by at least 25 percent.
result, farmers have had to euthanasia millions of pigs since April to avoid a backlog or, more economically, to speed up pork exports to China at more competitive prices than other countries.
The first phase of the U.S.-China trade agreement helped and inspired its farmers to grab and strengthen their market share in Chinese pork (19.7 percent) and pork chores (19.8 percent) in the first half of this year, even as political tensions between the U.S. and China persist.
the U.S., Canada lost almost half of its market share in pork and offal products to other exporters between January and June.
, as shown above, Canadian pork exporters saw a sharp decline in the four months from September to December 2019.
main reason for the suspension of Canadian pork factories to China because of counterfeit veterinary health certificates attached to pork products since June 25.
(2019).
the ban will be lifted from November 5, 2019, it will have far-reaching consequences for the first half of 2020.
of all pork exporters, Canada had the lowest year-on-year increase (35.8 per cent) and the highest rate of reduction in pork guts (-24.2 per cent) from January to June this year.
, its pork and visceral products fell from 3rd to 3rd to 6th.
COVID-19: Overseas meat is more destructive than African swine fever Since the second half of 2018, when the African swine fever (ASF) broke out and spread in Asia, pork producers in the US and Europe consider the virus to be very serious.
they do everything they can to protect animals from ASF.
, however, some producers have put aside their guard over COVID-19, with a greater impact on pork consumption than on the supply chain of the entire pork industry.
since April, a growing number of overseas pork producers have had to restrict or suspend operations as many employees at meat factories in the US and Europe have been positively tested.
, in late June, the COVID-19 virus was found on imported salmon pickaxes in Beijing's largest wholesale agricultural market.
, China has not only conducted large-scale nucleic acid tests on workers in wet markets, but also on imported seafood and meat products.
, more than 40 overseas meat factories have suspended exports to China, d'Ath, since June.
61 per cent of these exports are to China, while the rest are exports of beef, poultry and lamb.
geographically, the ban includes 15 countries, with Europe accounting for 47 per cent, South America for 20 per cent, North America and Oceania for 13 per cent and Central America for 7 per cent.
, however, is not the determining factor in determining the number of banned quantities on each continent, but their market share in China.
among the banned pork factories, the shutdowns at German factories 202 and Dutch factories 28 have had a greater impact on China's pork import market than other exporters because of their larger export volumes and many years of customer base in China.
: Performance varies widely, and while China's pork import market is generally booming, the performance or price of each imported pork product varies widely, especially since March this year.
end of August this year, eared pig heads were particularly prominent in all products in China's pork import market, up 91% year-on-year.
main driver of the stock is that pig's head inventory levels are lower than ever before.
, as shown in the chart above, pig heads fell sharply in November and December, costing importers and wholesalers who were pursuing high prices at least 30 per cent.
, when the market rebounded in June, they cautiously adopted a pre-sale strategy with little inventory.
when demand for pig's head resumed in the processing and catering industry, the shortage of pig's head intensified, setting pig's head prices at record highs.
opposite to the head, half of the tibia underperformed at the same time.
prices fell 23.3 per cent by the end of August, even in good conditions.
that although the product followed a similar trend to that of the owner early on, there was disagreement in June.
this may be mainly due to weak demand for half of the tibia from a single food service channel and geographical concentration in some provinces in the east and south.
, however, not all bone products show a downward trend.
, for example, has risen 77.1 per cent in August compared with August last year.
growth factors include: 1).
variety of recipes and channels for restaurants and supermarkets;
when the price of ribs or ribs skyrockets, meaty corsages can replace ribs or ribs;
supply of bra bones from overseas factories has declined this year.
forecast for the future of China's pork import market, the following key factors will affect its supply and demand balance in the coming months: on the one hand, a sharp drop in domestic pork production has stimulated Chinese pork imports.
, pork imports in the first half of 2020 exceeded the total for the whole of 2019.
pork production is expected to resume by the second half of 2020, but will remain below normal by the end of 2000.
, from January to early September this year, a total of 540,000 tonnes of frozen pork reserves were put into the local market in 31 batches to curb pork prices.
the first eight months of this year, even compared with the whole of 2019, increased by 285.7 per cent.
more importantly, based on the latest batch production date, we can assume that there are still sufficient or large stocks of frozen pork to be released in the remaining months of the year, which is negative news for the import market.
, on the other hand, pork consumption in restaurants, schools and businesses is beginning to recover strongly, as China's COVID-19 is now well controlled.
addition, the upcoming three of China's most important festivals (mid-autumn and National Day in September and October, and the Spring Festival in December and January) will also significantly increase domestic pork consumption.
, however, a recent national campaign against food waste may somehow curb this growth by encouraging consumers to order or make fewer dishes to avoid waste.
, this is a big problem when the world has good control over COVID-19 and whether there will be a second wave in the future.
, in China's fast-changing pork import market in 2020, this is the best time to properly assess the situation.
Zhang, head of business intelligence at
IQC Insights, reviews and forecasts China's rapidly changing pork import market in 2020 based on china's domestic supply and demand situation and the performance of global pork exporters, major factories and differentiated pork products.
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