Trade Growing dependence on China

by Editor fleischwirtschaft.com
Wednesday, April 29, 2020
 Increasing dependence on China as a trading partner entails risks.
Photo: imago images / McPHOTO
Increasing dependence on China as a trading partner entails risks.

At the beginning of the year the EU was only able to achieve small increases in pork exports. Higher prices, however, resulted in significantly better revenues.
In the first two months of 2020, the European Union's pork exports increased slightly year-on-year. According to the EU Commission, a total of 881,850 t of pork including offal were sold to third countries in January and February by the 27 member states excluding the UK, 2.3% more than in the same period last year. The increase in export revenues was much stronger at 31.7% to € 2.21 bn. because selling prices were significantly higher than in the same period last year.

The moderate growth in EU export volumes was solely due to the booming pork deliveries to China. Compared with the first two months of 2019, these rose by 215,100 t or 82.5% to 475,950 t. This means that business with China accounted for 54% of all EU exports; in the same period of the previous year it was only 30.3% and in the full calendar year 2019 it was still 41.3%. Sales to the People's Republic in the period under review brought in a good € 1 bn. for suppliers, almost half of all revenues.
Schwein Belgien
(Bild: Imago Images / Reporters)

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Stiffer competition from the USA

As good as sales in China have been so far, the increasing dependence on this customer also harbours risks, according to analysts. China is already ordering significantly more goods from its competitor as a result of the trade agreement with the United States. Due to the dramatic drop in slaughter pig prices, the USA can also offer pork at very low prices, which European exporters are already feeling the effects of falling product prices. According to forecasts, China will again need a lot of foreign pork this year due to the continuing shortage of supply caused by African swine fever (ASF); however, China has started to build up its herds of pigs, and this should limit the need for imports again in the medium term.

Exports to Great Britain have fdeclined

The UK's withdrawal from the EU at the end of January has led to the UK becoming the second most important third country market of the now 27 member states. In the first two months, 282,681 t of pigmeat and offal were sold there, according to the Commission, although this was around half less than in the same period last year. In the run-up to the brexite planned for 29 March 2019, there had been great uncertainty about its design, which had led to increased imports of pork. In addition to Great Britain, Japan, South Korea, Hong Kong, Australia and the Philippines also bought significantly less pork in the EU in January and February of this year. Increases in sales compared to the previous year were reported from Brussels for only a few countries, including Vietnam, Ivory Coast and Congo.  
Spanien Flagge - BU Export China
(Bild: pxhere.com)

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