March 17, 2015

As the Chinese pork industry undergoes a structural shift, and smallholder producers exit the industry, the world’s biggest pork-consuming market (which consumes over half the world’s pork) will see a greater reliance on foreign imports.

Despite the greater reliance on imports, consumption is expected to see only modest growth, reaching 57.2 million tons for 2015, up from 57.17 million tons last year, according to the U.S. Department of Agriculture’s (USDA) Beijing bureau. Driving this decrease is an elevated awareness of low-fat diets among urban consumers, consumer concerns about food safety prompting more consumers to opt for branded pork, and a rising demand for beef as a low-fat, alternate source of protein by the country’s growing middle class.

China’s hog herd is forecast by the Beijing bureau to shrink by 9.8% this year to its smallest size since 2003 – the sharpest decline since 1996, and a steeper decline than is forecast by the official department. China’s pork production is estimated to be 56.10 million tons this year, down from 56.71 million tons in 2014.

The Beijing bureau predicts that imports will make up for this production shortfall, forecasting an increase in imports of more than 50% to reach 1.2 million tons – significantly above the 1 million ton official forecast by the department. Of these imports, the EU will see the greatest increase as China opens its market to more EU countries, as Chinese pork imports from the U.S. are expected to decrease because of the strong U.S. dollar and China’s ban on the feed additive, ractopamine.

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