Outlook for Major Pork Importing
Countries
Introduction
Following is the third in a four-part
series from the U.S. Meat Export Federation (USMEF) that examines key
statistics and trends from the U.S. Department of Agriculture’s beef and pork
trade outlook forecast for 2008 through 2017, which was developed in November
2007 and released last week. The USDA 10-year outlook is a scenario
based on what would be expected to happen under a continuation of current farm
legislation and specific assumptions about external conditions. It
is not a forecast. USDA data is based on carcass weight equivalent
(CWE) and does not include variety meats.
Highlights - The USDA’s 10-year outlook for the pork
market offers this projection for the landscape of major pork-importing
countries in the year 2017:
·
Largest pork importers: Japan,
Russia, Hong Kong/China, South Korea and Mexico. Hong
Kong/China moves from No. 5 to No. 3 pork importing region over the outlook
period.
·
Largest growth markets:
o Russia
(increase of 238,000 metric tons – 524.7 million pounds – or 28 percent)
o Korea
(increase of 137,000 metric tons – 302 million pounds – or 30 percent)
o China
(increase of 136,000 metric tons – 299.8 million pounds – or 105 percent)
o Mexico
(increase of 131,000 metric tons – 288.8 million pounds – or 30 percent)
o Japan
(increase of 100,000 metric tons – 220.4 million pounds – or 8 percent)
o
China - China’s pork imports are revised higher for 2007 in the new
USDA forecast, showing a 44 percent increase over 2006 imports, which likely
understates actual growth, according to Erin Daley, USMEF manager of research
and analysis. “China’s imports increased beyond anyone’s
forecasts,” said Daley. China’s imports are currently expected to
increase by 15 percent in 2008 and another 12 percent in 2009.
China’s total imports in 2007 increased 116 percent according to
statistics reported by the Global Trade Atlas (GTA), while Hong Kong’s total
pork imports increased by 38 percent. Data from GTA includes variety
meats.
For comparison, China’s imports are forecast to be about
equivalent to Canada’s imports by 2010, and exceed Canada’s imports through the
rest of the outlook period. However, both China and Canada are net exporters
over the entire outlook period. China’s exports are nearly
equal to China and Hong Kong’s combined imports. China’s exports are revised
down slightly, but this year USDA revised the 2016 import estimate to 256,000
metric tons (564.4 million pounds), nearly five times larger than last year’s estimate
for China’s pork imports in 2016.
Only a handful of countries can legally export pork to China,
including the United States, Canada, Denmark, France, Italy (Parma Ham only)
and Ireland. Despite the relatively strict access
conditions, offal and pork by-products from a wide range of countries enter
China, primarily via Hong Kong. In addition to the United States,
Canada and Denmark, the largest suppliers include Brazil, Germany, the
Netherlands, the United Kingdom, Belgium and Spain.
During 2007, the United States accounted for 44 percent of
China’s and 5 percent of Hong Kong’s pork imports. When variety meats are
included, the United States accounted for 26 percent of China’s imports (the
European Union had 63 percent with France as the largest supplier) and 10
percent of Hong Kong’s imports (the EU had 46 percent followed by Brazil with
17 percent).
Pork continues to lead in China’s per capita meat
consumption. The ratio of pork, poultry, beef, mutton and other
livestock product consumption is 64 percent, 19 percent, 9 percent, 6 percent
and 2 percent respectively.
For the nation as a whole, most pork intake is at-home
consumption. However, China’s foodservice industry is growing
rapidly (in excess of 15 percent per annum) and the frequency of meals consumed
outside the household is increasing, especially in major
cities. The number and diversity of restaurants is growing
rapidly, and there is a proliferation of chain restaurants that constitute
potential large end-users of U.S. pork.
U.S. pork products enjoy extensive nationwide distribution
within China. It is believed that most U.S. pork offal products are
utilized in catering. Very little U.S. and other imported offal is
sold with a country of origin designation; i.e., in modern retail outlets.
There is a small but growing volume of U.S. foodservice pork
items (e.g. bone-in loins, butts, jowl meat, riblets) utilized by higher-end
foodservice establishments. Most of the outlets are
Western, but also include Korean barbecue, hot pot/shabu-shabu, and some
Chinese restaurants. USMEF works with these outlets to feature
U.S. pork on menus as a premium foodservice offering.
Mexico - Mexico’s imports were reduced in 2007 and over the
outlook period, with a slow recovery of 2006 import volumes (by 2013 which is
similar to USMEF estimates). Mexico’s self-sufficiency
is expected to increase from 77 percent to 79 percent in 2008 due to an
anticipated 4 percent increase in domestic production. The
United States dominates Mexico’s pork imports with 87 percent to 90 percent
market share. Canada is the second largest supplier, followed by much smaller
volumes from Chile. Mexico consumes much less pork than either
poultry or beef. Of combined beef, pork and poultry
consumption during 2007, poultry accounted for 43 percent, followed by beef
with 36 percent and pork with 22 percent.
USMEF is promoting U.S. pork in Mexico through a variety of
programs, including seminars for small trading companies, boutiques and butcher
shops to increase distribution in an effort to regain and surpass 2006 export
volumes. USMEF estimates a recovery of 2006 export volumes during 2012, similar
to USDA’s estimate of 2013.
Japan - Japan remains the largest pork importer in the world over the
outlook period, with 2017 imports totaling 1.3 million metric tons (more than
2.8 billion pounds) compared to 1.2 million metric tons (more than 2.6 billion
pounds) estimated for 2007. Half of Japan’s pork is imported,
according to USDA estimates. The United States is the largest
supplier to the Japanese pork market, with 38 percent market share during 2007,
followed by the European Union (EU-25) with 25 percent (mainly Denmark), and
Canada with 19 percent.
China exports processed sausages to Japan, accounting for 7
percent of total pork imports. Mexico and Chile benefit from bilateral trade
agreements with Japan, and they each account for about 5 percent of Japan’s
total pork imports. Although competition is fierce, the United States’ export
market share has increased from 33 percent in 2005 to 38 percent during
2007. USMEF expects 3 percent annual growth in U.S. pork exports to Japan
while USDA expects 1 percent annual growth in Japan’s total pork imports from
all suppliers.
The United States could continue to increase market share, but
Japan’s total pork imports are likely to increase at a higher rate if domestic
production continues its long-term decreasing trend. High feed prices, aging
farmers and impacts of a potential Doha agreement could all result in
lower domestic pork production. Pork is the most popular meat
in Japan, excluding seafood, with per capita consumption at 20 kg per capita
(44 pounds) compared to poultry and beef at 15 kg (33 pounds) and 9.5 kg (20.9
pounds) per capita respectively (carcass weight
equivalent). Seafood consumption is declining due to high
prices. From 2000 to 2005, consumption fell 14.4 percent while pork
consumption increased 12 percent, beef fell 11 percent (due to BSE in domestic
herd followed by U.S. case) and chicken consumption increased 1 percent.
High value pork items, including chilled loins, account for
significant volume and value of U.S. exports to our leading market. USMEF Japan
conducts a variety of programs to promote high quality U.S. pork as an everyday
menu item, including cooking schools using celebrity chefs to teach housewives
how to prepare U.S. pork.
South Korea - USDA nearly doubled its pork import
forecast for South Korea in 2007 imports. It projects a 6 percent
increase in 2008, followed by 4 percent and 3 percent growth in 2009 and 2010,
and then imports are projected to increase by 2 percent annually through
2017. South Korea is currently about 70 percent
self-sufficient in pork production but, like Japan, self-sufficiency will likely
continue to decrease as farmers face higher costs of
production. The Korea-U.S. Free Trade Agreement (KORUS FTA)
would provide duty-free access to most U.S. pork items by 2014 regardless of
the implementation date. The USDA forecast, which is based on
current policy, does not assume approval of the KORUS FTA.
The EU is currently the largest supplier to South Korea with 42
percent market share, followed by the U.S. with 26 percent, Canada with 18
percent and Chile with 13 percent. The KORUS FTA would
essentially put U.S. pork on a similar duty reduction schedule as the
Chile-Korea FTA with both countries receiving duty-free access in
2014. The EU primarily supplies single-ribbed bellies to the
South Korean market while top U.S. items include picnics
and Boston butts.
To defend and increase U.S. market share in South Korea, USMEF
Korea has targeted BBQ restaurants and is educating staff about belly, collar
butt and spare ribs. It worked with restaurants to prepare for
COOL regulations at the restaurant level by helping chefs understand the
benefits of serving high quality U.S. chilled pork.
Russia - Russia provides strong domestic support to its pork industry,
but it still is only 70 percent self-sufficient. Brazil is the largest supplier
with 47 percent market share, followed by the EU with 32 percent, and the
United States and Canada each account for about 10
percent. The EU benefits from access to the largest
country-specific tariff rate quota (TRQ) of 249,000 metric tons (548.9 million
pounds) compared to the U.S. TRQ of 49,800 metric tons (109.8 million pounds).
Brazil utilizes the “3rd country TRQ” (193,400 metric tons in
2008 – more than 426 million pounds) and benefits from preferential developing
country duties of 11.25 percent compared to 15 percent paid by other major
suppliers. Pork consumption in Russia is about equivalent to
poultry consumption at 19 kg per capita (41.8 pounds) while beef consumption is
nearing 17 kg (37.4 pounds) per capita. Much of the pork
consumed in Russia is processed. Therefore common U.S. export
items include frozen picnics, trimmings, and hams. One
example of a USMEF promotion in Russia is a Pork Festival in St.
Petersburg, where journalists and chefs attended a master class.
USMEF forecasts reflect uncertainty regarding Russia’s TRQ
system after 2009. Currently, the weak dollar and plentiful U.S. pork supplies
are enhancing U.S. competitiveness versus Brazil in the Russian pork
market. However, it is difficult to forecast exchange rate
fluctuations, and it is unknown whether Russia will continue its TRQ system
after 2009. These and other factors will impact U.S. pork
competitiveness in the Russian market over the outlook period.
Next: Major Beef Importing Countries - The
U.S. Meat Export Federation (www.USMEF.org) is the trade association responsible for
developing international markets for the U.S. red meat industry and is funded
by USDA, exporting companies, and the beef, pork, corn, sorghum and soybean
checkoff programs.
Norb Leahy, Dunwoody
GA Tea Party Leader
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