World meat industry news

In 2022, the meat market in China was under pressure from negative factors: the rise in feed prices, the spread of the COVID-19 epidemic, which made it difficult for enterprises to work, and a decrease in demand for meat products from catering and tourism.

Production and import of pork

Pork remains the most preferred type of animal protein in China, due to cultural and culinary traditions, today the country is the world's largest producer and importer of pork.

In 2022, China's cumulative investment in the pig industry was 14.2 billion yuan, down 80% from a year earlier.

Due to lack of funds, the import of breeding pigs has significantly decreased, and the increase in meat production has also slowed down. At the same time, the slaughter capacity of pig-breeding enterprises increased, and some companies switched to deep processing of pork.

In general, pork consumption in China has declined in 2022, and it has fallen even lower than expected (one of the main reasons is the spread of COVID-19 and restrictions caused by the epidemic).

Between January and November, the slaughter volume reached about 254.4 million heads, which is 7.8% more than a year ago. At the same time, the volume of trade in pork carcasses in the wholesale link decreased and amounted to 640.1 thousand tons, which is 31.3% less than in 2021.

As for pork prices, during 2022 their dynamics was multidirectional. So, in the first half of the year, prices decreased on an annualized basis, and from July they began to grow - and by October they increased by 45.7% on an annualized basis. By the end of the year, in November and December, the price of pork began to become cheaper compared to the previous month, the annual increase decreased, and the average annual indicator continued to decline.

During the price “spike” in the second half of 2022, the retail price of pork jumped to 40 yuan/kg, which led to a decrease in pork consumption.

Prices for live pigs were also subject to strong fluctuations. For example, in March, prices fell below 11.5 yuan/kg, while the highest prices were recorded in October - over 28 yuan/kg.

To stabilize supplies, the government of the republic has repeatedly released frozen pork from the state reserve of the country to the market. In the first half of the year - 16 times, with a total volume of 518 thousand tons, and in the second - 7 times, which totaled 137.1 thousand tons.

If we talk about foreign supplies, then in 2022 there was a decrease in the volume of imported pork and pork by-products, while the import of processed pork, on the contrary, increased.

According to the Ministry of Agriculture of the People's Republic of China, the volume of imports of pork and offal in 2022 is estimated at 2.8 million tons, which is 43% less than a year earlier. For 11 months, 1.5 million tons of pork (-56% per year) and 1 million tons of pork offal (-16%) were imported into China. In value terms, China's imports are estimated at 22.3 billion yuan, down 65% year on year. The main suppliers are Spain, Brazil, Denmark, the USA, the Netherlands, Canada, Chile, the UK, France and Ireland, which account for 97% of China's pork imports.

Prospects for Russian exports

According to IMIT estimates, from January to November 2022, Russia's share in chicken meat imports to China amounted to almost 10%, domestic producers brought 116 thousand tons of products to China. Over the year, the volume of deliveries increased by 10%. In the structure of exports, the main product, as before, is chicken by-products (78 thousand tons), mainly chicken paws (50 thousand tons), chicken wings (35 thousand tons) are also in demand.

In 2022, Russian exports of turkey meat to China increased by 60%. However, so far this type of meat is supplied in small volumes: 7.4 thousand tons were shipped in eleven months, of which 51% are turkey drumsticks and 36% are wings.

And if the supply of chicken meat to the Chinese market for our producers has become a major export destination, then the situation with pork is the opposite - for the time being, this market is closed to domestic pig breeders.

Despite the fact that the volume of meat imports to the PRC is declining, which is associated with the restoration of local pork production and a sufficient volume of poultry meat production, the Chinese market remains extremely promising for Russia. Now the share of China accounts for about 40% of the total export supplies of chicken meat from Russia. Our country has become one of the three largest suppliers of chicken meat to the world's largest consumer market, and we cannot lose it.

Developed trade relations with Chinese consumers of chicken meat allow us to diversify supplies and increase exports of turkey meat. In addition, work has recently been carried out to allow Russian pork to enter the market of this country. And with well-organized logistics, it will be faster and cheaper to deliver our pork to China.

article by Lyubov Savkina, CEO of the Emeat information and analytical agency, prepared specifically for sfera.fm