Weekly Product Updates

W43: Pork Update

Frozen Pork Ham & Shoulder
China
Published Nov 3, 2023
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In W43 in the pork landscape, Rabobank foresees continued global growth in pork consumption until 2030, accompanied by increased competition among major pork-exporting countries. The forecast indicates an average annual growth rate of 0.7% in global pork consumption from 2022 to 2030. The decline in pork consumption in Europe could be offset by population growth and economic development in the long term, along with easing inflation, especially in 2024. Robabank highlights countries with cost-effective production, such as Brazil and the United States (US), as having a competitive edge in the pork export market. In contrast, Europe may face challenges due to stricter animal welfare and regulatory requirements, as well as potential export taxes. While African swine fever (ASF) has impacted the global pork trade, Rabobank predicts recovery in Southeast Asia and Asia by 2024. Additionally, research into vaccines and gene-editing technologies could provide certain countries with a competitive advantage.

Eurostat reports that pork production within the European Union (EU) saw a decline of 8.6% in H1-2023, with an estimated annual production decrease of 6.6%. Concurrently, consumption is expected to decrease by 5% year-on-year (YoY) in 2023, resulting in a per capita consumption of 30.4 kilograms (kg). The pork price surge has further influenced this downward consumption trend, leading consumers to opt for poultry meat over pork. This production reduction has been observed across major European pork-producing countries such as Germany (-9.7% YoY), Denmark (-21.5% YoY), Spain (-5.8% YoY), and the Netherlands (-14% YoY). The supply reduction has contributed to rising prices and had an impact on pork exports to non-EU nations, resulting in a 20% decrease in shipments in H1-2023 compared to H1-2022.

The United States Department of Agriculture (USDA) expects the Latin American pig sector to grow in 2024. Pork production is projected to reach 8.6 million metric tons (mmt) in 2024, a 3.6% increase compared to the 2023 volume of 8.3 mmt. Projections also indicate a 4.7% YoY growth in exports, totaling approximately 2.1 mmt, with Brazil, Mexico, Chile, and Argentina playing pivotal roles. Imports are expected to increase by 0.9% YoY to approximately 2 mmt. Consumption is forecasted to rise by 2.7% YoY to 8.5 mmt, primarily due to increased domestic production as opposed to relying on imports, which has been the trend in recent years.

Brazil's pork production is expected to increase by 4.9% YoY to 4.83 mmt in 2024. Brazilian pork exports may reach 1.53 mmt in 2024, a 5.5% YoY growth, while imports are estimated at 2 thousand mt. Pork consumption in Brazil is projected to grow by 4.6% YoY in 2024, reaching 3.3 mmt. Meanwhile, Argentina is forecasted to produce 1.6 mmt of pork, a modest 1.3% YoY increase, maintaining its position as the second-largest producer in Latin America. Argentina's imports are estimated to remain at the 2023 level, totaling 1.31 mmt, solidifying its status as the largest importer in the Latin region and the third largest globally. Exports from Argentina are expected to grow by 1.9% YoY to 265 thousand metric tons (mt), and consumption is likely to increase by 0.6% YoY to 2.65 mmt.

Lastly, China's pig production is expected to decrease by 1% YoY to 695 million heads in 2024 due to a low sow population. This anticipated decline is due to the ongoing challenges, including reduced consumption, ASF outbreaks, and early slaughters, which are expected to persist throughout 2023. Live pig imports are estimated to rise slightly to 6 thousand heads, and live pig exports are poised to increase to 1.2 million heads. Pork production in 2024 is projected to decrease by 1% YoY to 55.95 mmt due to reduced slaughter volumes and diminishing pig inventories. Pork consumption is also expected to fall by 1% YoY to 58.15 mmt in 2024, primarily due to low domestic production. Pork imports in 2024 are forecasted to slightly increase to 2.32 mmt, while pork exports are estimated to grow by 14% YoY to 120 thousand mt. Hong Kong and Japan are expected to remain key export destinations.

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