Trade with pork: Exports 2020 on record cours...
Trade with pork

Exports 2020 on record course

Imago Images / Westend61
Thanks to the extensive demand from China, the pork exports of the two competitors, the European Union and the United States, have reached record levels.
Thanks to the extensive demand from China, the pork exports of the two competitors, the European Union and the United States, have reached record levels.

USA, Washington. The European Union and the United States recorded new record levels of foreign sales of pork in the first three quarters.

Thanks to the extensive demand from China, the pork exports of the two competitors, the European Union and the United States, have reached record levels. After the first three quarters of 2020, the two most important suppliers on the global market are equally showing an increase in exports of a good 16% compared to the same period last year. According to the EU Commission on the basis of preliminary data from the Statistical Office of the European Union (Eurostat), a total of 3.91 mill. t of pork including offal from the 27 member states plus the United Kingdom were sold to third countries; this was 545,000 t or 16.2% more than from January to September 2019. However, the almost complete ban of Germany on exports to third countries due to African swine fever (ASF) and the corona-related shortfall in deliveries from EU slaughterhouses to China could put pressure on the growth rate in the fourth quarter.

By far the most important third country customer of the EU suppliers was China. A good 2.44 mill. t were shipped there in the period under review; this corresponds to an increase of 892,000 t or 57.6% when compared to the same period of the prior year. A good 62% of all EU pork sales thus went to China. If exports to Hong Kong, which rose by 10.7% to 166,000 t, are added to this destination, the export share was almost 67%.

Growth also in Vietnam

With the exception of Vietnam, where EU pork exports rose by 9.3% to 82,000 t compared with the first three quarters of 2019, all other major customers saw their sales volumes decline, in some cases very significantly. The Japanese, for example, bought almost a fifth less product in the Community at 275,000 t; business with South Korea showed an even sharper decline of 27.9% to 150,000 t in relative terms.

Exports to the Philippines slumped by almost half to 105,000 t. In addition, customers in the USA and Australia each suffered a drop in sales of around 30%, and the upturn in deliveries to the Ukraine also came to an end; the volume sold there fell by 17.1% to 58,000 t.

USA generates almost € 5 bn.

US pork exports are also expected to reach a new historic high in 2020. According to the USMEF, the American Meat Export Organization, exports including processed goods amounted to almost 2.22 mill. t from January to September; this was 310,600 t or 16.3% more than in the same period last year. Export revenues increased almost to the same extent, namely by 16.4% to € 4.81 bn.

The main reason for this upswing was the strong increase in pork deliveries to China by 429,000 t or 127% to 767,500 t. The "Phase 1 Trade Agreement", under which China has committed itself to purchasing larger quantities of US agricultural products and in some cases reduced punitive tariffs on US products, has also helped in this respect. However, according to the USMEF, US pork is still subject to a 25% tariff disadvantage in China.

Including Hong Kong, US pork deliveries there nevertheless doubled to 800,750 t compared to the same period of the previous year, representing 36.1% of total exports, which was well below the EU level.

ASF increases Asian exports

US exporters of pork have not only benefited from the loss of pig stocks due to the ASF in China, but the same was true for other countries in Asia affected by the animal disease. Compared to the first three quarters of 2019, deliveries to Vietnam tripled to 20,700 t; sales to the Philippines increased by 8% to 33,000 t.

Japan, the second most important customer in terms of value, bought 284,100 t of pork in the United States, around 2% more than in the previous year, and paid € 1.01 bn. for it. Exports to neighboring Canada also performed better, increasing by 6.2% to 169,750 t.

Elsewhere, however, US suppliers were confronted with a declining business trend. Mexico, for example, demanded significantly less processed meat, and the quantity sold over the southern US border fell by 7% to 490,900 t compared with the first nine months of 2019; the corresponding export revenues were even 14% below the previous year's level. US suppliers suffered just as much as their EU competitors from the weakness in sales to the large global customer South Korea. Deliveries of pork there fell by a good fifth to 121,800 t.

US beef exports down

While US pork exports performed well even during the Corona crisis, beef producers found it harder to sell internationally. According to the USMEF, the export volume in the first three quarters of 2020 fell by 8% to 911,900 t compared to the same period last year. Export revenues fell by 9% to € 4.69 bn.

According to the Export Association, the corona pandemic continues to negatively impact demand for US beef in several key markets, including Mexico, Central America and the Caribbean. In addition, some Asian markets have recently reintroduced social distancing measures, but this is largely offset by increased demand in retail outlets.

Sales slump in Mexico

US suppliers suffered a particularly sharp drop in demand for beef from their customers in Mexico in the first nine months of 2020; sales volumes in the neighboring country slumped by 28.4% to 126,100 t and the corresponding export revenues by a third to € 464 mill.

The decline in exports was less pronounced in the case of the two top customers Japan and South Korea, where the decline was around 3% each to around 23,400 t and just under 190,000 t respectively. US beef exports to the Middle East fell by 28% to 43,400 t; one fifth less was sold to Indonesia and the Philippines.

In addition, deliveries to the EU fell by 26% to 10,500 t. By contrast, business was better with neighboring Canada, where exports rose by 12.3% to a good 83,000 t. China also ordered more beef in the USA; the quantity shipped to the People's Republic increased - starting from a low level - by 160% to almost 17,900 t.

Source: fleischwirtschaft.de; AgE
stats