W12 Pork Update: Paraguay's Pork Exports Thrive with Zero-Tariff Deal in Taiwan, US Hog Market Responds to Strong Demand with Higher Prices

Published 2024년 4월 1일

In W12 in the pork landscape, Paraguay celebrates a major win with Taiwan's decision to waive tariffs on pork exports, aiming to boost trade and strengthen the Paraguayan pork sector. This move anticipates a substantial export surge, targeting USD 100 million annually from the current USD 15 million. Meanwhile, the US hog market experiences heightened demand, increasing slaughter rates and elevating prices. Feb-24 witnessed a significant rise in hog slaughter, up nearly 5% YoY, alongside a 1.8% YoY increase in hog prices. Pork sales surged by 5% YoY, with carcass cutout values up by 8.3% YoY, prompting the USDA ERS to revise its Q1-24 pork production estimates upwards.

Paraguay Secures Zero-Tariff Access for Pork Exports to Taiwan

Paraguay's pork industry received a significant boost with the recent announcement of a zero-tariff agreement for pork exports to Taiwan, its primary export market. Previously subject to a 12.5% tariff, Paraguayan pork will now enter the Taiwanese market duty-free. This policy change aims to increase exports and strengthen the Paraguayan pork industry. The Paraguayan government anticipates a significant rise in pork exports to Taiwan, to reach USD 100 million annually, compared to the current value of USD 15 million.

Paraguay exported 4.64 thousand metric tons (mt) of pork to Taiwan in 2023, representing 61% of its total pork exports for the year. This market also accounted for 72% of Paraguayan pork’s total export value (USD 13.8 million) in 2023. The tariff exemption is credited to joint efforts by the Paraguayan government and the private sector. Paraguay's National Animal Quality and Health Service (SENACSA) data indicates that 1.2 thousand mt of pork were exported to Taiwan in the first two months of 2024, valued at USD 3.5 million. The zero-tariff agreement is expected to enhance the competitiveness of Paraguayan pork in the Taiwanese market, potentially leading to increased export volumes and revenue generation for the Paraguayan pork industry.

Strong Demand Drives Higher Slaughter and Prices in the US Hog Market

The United States (US) hog market is experiencing robust demand, leading to increased slaughter and higher prices across the supply chain. Feb-24 saw a higher-than-anticipated pace of US hog slaughter, with inspected numbers reaching nearly 11 million head, representing a year-on-year (YoY) increase of almost 5%, accounting for the additional slaughter day in Feb-24. Increased demand from wholesalers for pork is a key driver of the market. Processors responded by bidding up hog prices, with the Feb-24 live equivalent price for 51 to 52% lean hogs averaging USD 55.24 per hundredweight (cwt), indicating an increase of 1.8% YoY.

Strong demand is translated into higher pork sales. Processors and wholesalers sold an estimated 2.4 billion pounds (lbs) of pork in Feb-24, representing an increase of 5% YoY. Pork carcass cutout values also increased significantly, averaging USD 89.14/cwt in Feb-24, up 8.3% YoY. Based on the increased slaughter volumes, the US Department of Agriculture’s Economic Research Service (USDA ERS) has revised its Q1-24 pork production estimates upwards by 30 million lbs to 7.2 billion lbs, reflecting a growth of 1.3% YoY. The USDA ERS expects demand for hogs to remain strong throughout 2024, supported by continued positive pork demand.