China’s Surging Meat Imports to Sustain Record Levels Next Year

(Bloomberg) -- China's meat imports will hit record levels this year and next, as the nation diversifies suppliers to cope with the ravages of African swine fever in the pork market.

Purchases this year are likely to be 5 million tons and increase even more next year, said Wang Bin, a vice director at the nation's commerce ministry. Still, domestic pork supply should recover in the second half of 2020 as China stabilizes its pig production and as long as swine fever doesn't return in a big way, he said.

With swine fever expected to cut China's hog herd in half to about 200 million pigs, the country has opened the door to greater imports of not only pork but substitutes like beef and chicken. That's had a knock-on effect on the global market, with meat prices rising to the highest in almost five years.

Still, with pork prices continuing to hit record levels in China, demand for the meat could collapse by 50%, according to the farm ministry's Institute of Food and Nutrition Development in Beijing.

Households are now switching to other sources, pushing up the price of alternates like beef and poultry, alarming the government and giving the central bank an inflation headache. Even egg futures hit a record last week.

Despite the push to buy more from abroad, Beijing has said there isn't enough pork available in the world to fill the supply gap left by the disease, and the country needs to rebuild its domestic herd.

The global imbalance in supply-demand is expected “to drive higher and more volatile markets in the coming months, magnifying an already tenuous situation,” according to Rabobank.

To contact Bloomberg News staff for this story: Winnie Zhu in Shanghai at wzhu4@bloomberg.net

To contact the editors responsible for this story: Anna Kitanaka at akitanaka@bloomberg.net, Jason Rogers

©2019 Bloomberg L.P.

With assistance from Bloomberg