Rabobank China is the driver

by Editor fleischwirtschaft.com
Friday, March 03, 2017
Photo: Bärbel selbst / pixelio.de
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China Rabobank


China will continue to dominate the world meat production and trade over the coming years, although its animal protein industry is entering a period of transition, according to Rabobank’s China Animal Protein Outlook to 2020.

Demand growth is slowing, and the industry is changing in response – and it needs to. Growth in production and consumption offers opportunities for China’s producers and for global traders.

As China's economy slows, animal protein demand growth is following suit, but additional demand each year is still big in absolute terms. According to Chenjun Pan, Senior Analyst Animal Protein at Rabobank: “On the supply side, pork production will be reshaped, while poultry production faces uncertainty, and beef production will likely drop. As a consequence, meat imports are expected to increase steadily, further cementing China's role as the world's most significant meat importer.”

Some highlights from the report:

• In the coming years, additional production will mainly occur in the north and north-east, while in the south – where rivers and lakes are located – further development of pork production will be restricted.

• The breeding stock for white-feathered poultry depends on imports, making the whole supply chain vulnerable to any trading changes. Rabobank expects whitebird production to drop in 2017, due to the low level of breeding herd and trade restrictions.

• In 2017, beef production is expected to drop. Thereafter, the industry will grow at 1% to 2% each year, until 2020. However, beef demand is expected to outpace domestic production. This will lead to growing imports in the coming years. By 2020, imports are expected to make up more than 20% of the total supply.

• Meat imports are expected to increase steadily in the coming years ––across beef, pork, and poultry – reinforcing China’s position as the world’s most important meat trader. As total meat imports to mainland China reach over 6 mill. t in 2020, China will become – if it is not already – the main focus for meat exporters everywhere.

Two important questions arise from this increasing focus. The first is how China will look to influence global meat trade, given its dominant role. The second is how animal protein companies will look to establish a sustainable supply chain to meet China’s evolving market needs.

 

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