In W39 in the pork landscape, Rabobank reports that competition among leading pork-exporting countries is escalating, with Brazil, the United States (US), and Canada poised to gain a significant advantage due to their relatively low production costs. Brazil, the second-largest pork exporting country to China, secured a 24% market share over the past year, underpinning its cost-efficiency. Meanwhile, the US and Canada bolstered profits by maintaining key markets and affordable feed sources. Although price increases may loom due to production consolidation and sustainability efforts, they are not expected to impact trade levels significantly.
Conversely, the European Union (EU) faces challenges due to rising sustainability and animal welfare standards, coupled with the African swine fever (ASF) concern. This situation necessitates costly technologies and potentially affects imports. Nevertheless, the EU may maintain its competitiveness through gene editing and vaccine testing, improving product quality and safety.
Rabobank indicates that the global pork trade is supported by rising global consumption, projected to grow by 0.7% year-on-year (YoY) until 2030. This pork consumption surge is anticipated to be driven by factors such as inflation moderation, Southeast Asia's post-ASF recovery, population growth, and economic development in major producing countries. Furthermore, exchange rates, delivery costs, labor, and pork production expenses all play significant roles in determining the competitiveness of global pork exporters.
The Canadian pig population is anticipated to decline by 5% YoY at the beginning of 2024, driven by reduced slaughter capacity in Quebec and a decrease in the number of breeding sows. The most substantial production decrease is expected in Eastern Canada, following the closure of an Olymel slaughterhouse as the company reduces production levels. A modest hog production contraction is also expected in 2024, following an estimated 2% YoY shrink in 2023 due to decreased sow numbers. Nonetheless, fertility rates are expected to improve slightly as Ontario recovers from the Porcine Epidemic Diarrhea virus (DESv) in 2023. Canada’s live pig exports to the US are projected to decrease as producers adapt to reduced slaughter capacity.
Lastly, the Foreign Trade Secretariat (Secex) reports that Brazil’s fresh and frozen pork exports reached 82.8 thousand metric tons (mt), valued at USD 193.3 million until W4 of Sep-23. This indicates a 12.1% decrease in volume and a 16.3% drop in value compared to the same period in 2022. The daily average shipment for Sep-23 reached 5.5 thousand mt, a notable increase of 23% compared to the 2022’s average of 4.4 thousand mt. The daily average value stood at USD 12.89 million, a 17.1% rise compared to the USD 11 million in Sep-23. However, the price per ton experienced a decline, hovering around USD 2.33 thousand/mt, a 4.8% drop compared to the USD 2.45 thousand/mt in Sep-23. Safras and Mercado note that Brazil has improved its pork exports in 2023 by diversifying its sales and reducing reliance on China.