China/HK Pork Imports

Transcription

1 Current Situation: China/HK Pork Imports MAY Prepared Exclusively for Clients of Global AgriTrends 4 Chinese pig farming losses are mounting. Not only are live pig prices still moving lower, Chinese corn prices moved higher in April (to 2,255 RMB/ton, US$9.21/bu). Live pig prices averaged 10.8 RMB/kg in late April, the lowest level in almost 4 years (since July 2010). These weak prices are likely near seasonal lows, but may remain at these levels through May. By our calculations, the pig-to-corn ratio fell to 4.8 in late April. That level is in the "red" category suggesting more government intervention in the markets. While the Chinese government committed to a round of pork intervention purchases last month, no other purchases have been announced. The market for fresh pork is obvioulsy abundantly-supplied currently. However, the imported frozen pork market is somewhat differentiated from the domestic markets; March saw frozen pork imports above the levels of a year ago. Frozen imported pork is filling niche processed products and will likely continue near historical levels. 4 In a rare occurrence, the falling Chinese pig/pork prices are running below U.S. pig/pork prices for the first time in our dataset's history (5 years). U.S. carcass prices are now $5/cwt over the Chinese price; in mid-december Chinese carcass price eqivalents were $88/cwt (!) above U.S. levels. If we add freight+duties+vat taxes to U.S. pork, U.S. carcasses would land in China at US$168/cwt while Chinese carcass equivalents are at US$109/cwt. Economics would say the pork will stop flowing, but keep in mind that this spread analysis does not correlate well at all with import volumes. Nonetheless, we expect Chinese interest in U.S. pork to wane over the summer. 4 The mounting losses in the Chinese pig sector have led to some liquidation. As of mid-april commercial pig producers in China were losing around 358 RMB/head (US$57/head). And this is after 15 weeks of losses. Backyard production still accounts for 30% of production in China and backyard producers lack access to capital; when losses accrue, most sell pigs. The extent of liquidation is difficult to determine. China's Ministry of Agriculture reported that commerical pig producers processed 6% more pigs in Q1 versus a year ago, but they do not track backyard inventories. We know that losses in China lead to liquidation liquidation leads to tight supplies and higher prices in the future. The losses are extreme at this point and we expect liquidation in March/April to be strong. This will likely lead to tighter supplies into fall/winter of (a key demand period). The Chinese pork market roller coaster continues. 4 Overall we are forecasting a decline in U.S. pork exports to China due to higher prices and tight supplies. Offal will keep moving as China provides a singular outlet. EU suppliers will likely see growth in exports as the Russian ban will displace EU pork to third markets. We are forecasting 1% growth overall in. Due to the porous nature of meat traded between Hong Kong and China, this report shows total imports to the region. While total import volumes are shown by country on page 1 and page 8, all other data combines Hong Kong and China import data. Chinese Import data from Hong Kong data is exluded, as is Hong Kong import data from China. This allows the report to show a "regional" picture of pork imports. While Global AgriTrends believes that the data/information provided is accurate and complete, no warranty is made with respect thereto. Global AgriTrends shall not be liable for decisions or actions taken by the user based on the data/information. Reproduction of this information without written authorization is strictly prohibited. Copyright admin@globalagritrends.com

2 Metric Tons Metric Tons CHINA / H. KONG PORK IMPORTS -- BY COUNTRY -- Amounts include offal/variety meats Page 1 Oct 300, , , , ,000 50,000 - MONTHLY TREND U.S. Germany Denmark Spain Canada Brazil Others 28% 5% 7% 10% Nov 29% 23% 15% 12% 23% 7% % China/H. Kong Pork/PVM Imports 7% 9% 12% 80,000 70,000 Dec 30% 21% 60,000 50,000 30,000 10, ,2 U.S. Denmark Germany Spain Canada Brazil Others 6% 8% Jan 14 30% 11% 14% 10% 22% - 5% 12% 8% 11% 12% TOTAL PORK/PVM IMPORTS, BY SUPPLIER - METRIC TONS Mar Mar 14 Chg % 20 (1-3) (1-3) Chg % Feb 14 29% 20% TOTAL 181, ,444-3,101-2% 508, ,695 -,695-3% 16% U.S. 38,746 42,264 3,518 9% 122, ,078 -,239-11% Germany 32,032 29,385-2,647-8% 80,460 72,967-7,493-9% Denmark 21,439 19,236-2,202-10% 60,560 55,473-5,087-8% Spain 15,878 17,952 2,074 % 46,231 50,895 4,665 10% Canada 14,586 11,023-3,563-24% 39,978 35,019-4,959-12% Brazil 11,815 11, % 30,602 31,606 1,004 3% Others 47,050 46, % 128,244 9,657 11,4 9% 7% 8% Mar 14 26% 9% 11% 24% 7% Hong Kong 57,853 65,038 7,185 12% 159, ,352 17,918 11% China 123,692 1,406-10,287-8% 348, ,343-31,6-9% 6% 10% 11% 16% Data source: Global Trade Information Services

3 Metric Tons US $/lb CHINA / H. KONG PORK IMPORTS -- BY CATEGORY -- Page 2 $1.30 MONTHLY TREND - IMPORT VALUE (CIF) Mar 06 Oct 6% $1.20 $1.10 Prep, prsvd Offal Frozen 39% 55% $1.00 $0.90 $0.80 $0.70 Frozen Offal Prep, prsvd Nov 8% $ % 57% FROZEN PORK IMPORTS - MONTHLY Dec 9% 35,000 37% 30,000 54% 25,000 15,000 10,000 5,000 U.S. Brazil Spain Germany Others Jan 14 35% 9% 56% - Feb 14 7% FROZEN PORK IMPORTS, BY SUPPLIER - METRIC TONS 38% 55% Mar Mar 14 Chg % 20 (1-3) (1-3) Chg % TOTAL 65,002 67,846 2,844 4% 172, ,604,986 8% U.S. 9,923 15,279 5,356 54% 27,309 35,998 8,688 32% Germany,149 10,883-2,266-17% 33,843 27,190-6,652-20% Brazil 6,899 7, % 18,833 18, % Spain 6,285 8,349 2,064 33% 19,571 23,956 4,385 22% Canada 5,667 5, % 15,817 15, % Others 23,079 20,656-2,424-11% 57,245 64,923 7,678 % Mar 14 38% 7% 55% Data source: Global Trade Information Services

4 US $/lb US $/lb CHINA / H. KONG PORK IMPORTS -- BY CATEGORY AND SUPPLIER -- Page 3 All prices are C.I.F. 12-Month Totals $1.40 $1.30 $1.20 $1.10 $1.00 $0.90 $0.80 $0.70 $0.60 $0.50 Jun MONTHLY TREND - FROZEN IMPORT VALUE US$ Per Pound Jul Aug Germany Spain Sep Oct Brazil Nov U.S. Dec Jan 14 Feb 14 Mar 14 Thousand Metric Tons U.S. Germany Brazil Spain $1.10 $1.00 $0.90 $0.80 MONTHLY TREND - OFFAL IMPORT VALUE US$ Per Pound Canada U.S. Germany Thousand Metric Tons U.S. Germany $0.70 $0.60 $0.50 Jun Jul Aug Denmark Sep Oct Nov Dec Jan 14 Feb 14 Mar 14 Denmark Canada Over the past 6 months, frozen pork and offal have comprised 93% of total pork imports. Data source: Global Trade Information Services

5 CHINA / H. KONG PORK IMPORTS -- SUPPLIER EXCHANGE RATES -- Rates indexed at 100 Page 4 Prior 6 Years Less Competitive More Competitive Prior 6 Months Less More Competitive Both the Chinese renminbi and the Hong Kong dollar are pegged to a U.S. dollar range. The Chinese government most recently began to allow the range to expand In May by Prof. Werner Antweiler, University of British Columbia, Vancouver BC, Canada.

6 CHINA / H. KONG PORK IMPORTS -- MONTHLY AND YTD DATA TABLES -- Page 5 TOTAL PORK IMPORTS (Metric Tons) Mar Mar 14 Chg % 20 (1-3) (1-3) Chg % Offal 103,053 98,435 (4,618) -4% 301, ,604 (27,621) -9% Frozen 65,002 67,846 2,844 4% 172, ,604,986 8% Prep, prsvd,326 11,734 (1,592) -12% 34,074 33,602 (472) -1% Cured % % Chilled % % TOTAL 181, ,444 (3,101) -2% 508, ,695 (,695) -3% COUNTRY Mar Mar 14 Chg % 20 (1-3) (1-3) Chg % 1 U.S. 38,746 42,264 3,518 9% 122, ,078 (,239) -11% 2 Germany 32,032 29,385 (2,647) -8% 80,460 72,967 (7,493) -9% 3 Denmark 21,439 19,236 (2,202) -10% 60,560 55,473 (5,087) -8% 4 Spain 15,878 17,952 2,074 % 46,231 50,895 4,665 10% 5 Canada 14,586 11,023 (3,563) -24% 39,978 35,019 (4,959) -12% 6 Brazil 11,815 11,651 (164) -1% 30,602 31,606 1,004 3% Others 73,451 69,608 (3,843) -5% 128,244 9,657 11,4 9% TOTAL 181, ,444 (3,101) -2% 508, ,695 (,695) -3% TOTAL PORK IMPORTS (Million US$) CATEGORY Mar Mar 14 Chg % 20 (1-3) (1-3) Chg % Offal $ 197 $ 184 $ () -7% $ 595 $ 520 $ (75) -% Frozen 9 8 (1) 0% % Prep, prsvd (2) -5% % Cured % % Chilled % % TOTAL $ 370 $ 355 $ (14) -4% $ 1,048 $ 993 $ (56) -5% COUNTRY Mar Mar 14 Chg % 20 (1-3) (1-3) Chg % 1 U.S. $ 84 $ 97 $ 15% $ 265 $ 246 $ (19) -7% 2 Germany (11) -19% (29) -19% 3 Denmark (6) -15% (15) -% 4 Spain % % 5 Canada (7) -27% (14) -19% 6 Brazil % % Others (14) -9% % TOTAL $ 370 $ 355 $ (14) -4% $ 1,048 $ 993 $ (56) -5% Data source: Global Trade Information Services

7 CHINA / H. KONG PORK IMPORTS -- 6 MONTH DATA TABLES -- Page 6 TOTAL PORK IMPORTS (Metric Tons) CATEGORY Oct Nov Dec Jan 14 Feb 14 Mar 14 TOTAL % chg prior year* Offal 103, , , ,691 72,478 98, ,674-1% Frozen 63,438 68,176 71,856 69,804 48,954 67, ,074 % Prep, prsvd 15,309 16,501 18,351 12,715 9,153 11,734 83,764 28% Chilled % Cured % TOTAL 182, , , ,561 0, ,444 1,068,922 6% COUNTRY Oct Nov Dec Jan 14 Feb 14 Mar 14 TOTAL % chg prior year* 1 U.S. 41,527 41,505 43,961 40,490 26,324 42, ,071-5% 2 Germany 27,150 24,296 29,722 23,172 20,410 29, ,5-3% 3 Denmark 22,119 22,090 21,224 21,534 14,703 19, ,906-7% 4 Spain 18,648 17,012 22,192 21,056 11,887 17, ,747 27% 5 Canada 12,148 12,994 16,062,981 10,015 11,023 76,223-6% 6 Brazil 8,612,574 11,277 10,221 9,734 11,651 65,069-2% Others 52,281 53,851 61,983 55,106 37,617 46, ,771 28% TOTAL 182, , , ,561 0, ,444 1,068,922 6% TOTAL PORK IMPORTS (Million US$) CATEGORY Oct Nov Dec Jan 14 Feb 14 Mar 14 TOTAL % chg prior year* Offal $ 198 $ 200 $ 230 $ 201 $ 6 $ 184 $ 1,148-2% Frozen % Prep, prsvd % Chilled % Cured % TOTAL $ 366 $ 389 $ 432 $ 375 $ 263 $ 355 $ 2,180 5% COUNTRY Oct Nov Dec Jan 14 Feb 14 Mar 14 TOTAL % chg prior year* 1 U.S. $ 94 $ 98 $ 99 $ 90 $ 60 $ 97 $ 538 0% 2 Germany % 3 Denmark % 4 Spain % 5 Canada % 6 Brazil % Others % TOTAL $ 366 $ 389 $ 432 $ 375 $ 263 $ 355 $ 2,180 5% * Change from same 6 months of the prior year Data source: Global Trade Information Services

8 CHINA / H. KONG PORK IMPORTS -- Composition by Supplier -- Page 7 Year-to-date TOTAL PORK IMPORTS (Metric Tons) and % of Total Supplier Offal % Frozen % Prep, prsvd % Chilled % Cured % TOTAL (1-3) % 1 U.S. 68,760 25% 35,998 19% 3,783 11% % % 109,078 22% 2 Germany 44,469 16% 27,190 15% 1,293 4% % 72,967 15% 3 Denmark 39,714 15% 15,603 8% 154 0% - 2 1% 55,473 11% 4 Spain 20,708 8% 23,956 % 6,177 18% 1 0% 53 15% 50,895 10% 5 Canada 19,129 7% 15,653 8% 210 1% 26 5% 2 0% 35,019 7% 6 Brazil 10,612 4% 18,884 10% 2,110 6% - 0 0% 31,606 6% Others 80,824 30% 68,204 37% 21,985 65% 90 17% % 171,264 35% Total 273, ,604 33, ,695 55% 38% 7% 0% 0% 100% Supplier Offal % Frozen % TOTAL PORK IMPORTS (Mil US$) and % of Total Prep, prsvd % Chilled % Cured % TOTAL (1-3) % 1 U.S. $ % $ % $ % $ % $ % $ % 2 Germany % 48.5 % 3.3 4% % % 3 Denmark % % 0.6 1% % % 4 Spain % %.7 16% 0.0 2% % % 5 Brazil % % 7.5 9% % % 6 Canada % % 0.7 1% % 0.0 0% % Others % 97 25% 48 56% 1 39% 2 43% % Total $ $ $ 85.2 $ 2.2 $ 4.6 $ % 38% 9% 0% 0% 100% Data source: Global Trade Information Services

9 Page 8 CHINA / H. KONG PORK IMPORTS -- Composition by Supplier and Importer -- Year-to-date CHINA TOTAL PORK IMPORTS (Metric Tons) and % of Total Supplier Offal % Frozen % Prep, prsvd % Chilled % Cured % TOTAL (1-3) % 1 U.S. 53,290 30% 32,775 23% % - 86,463 27% 2 Denmark 37,979 22% 15,090 11% ,068 17% 3 Spain 16,708 10% 22,845 16% 0 1% - 87% 39,566 12% 4 Canada 17,118 10% 14,075 10% ,193 10% 5 Germany 10,689 6% 16,945 12% 38% ,648 9% 6 Poland 9,127 5% 12,154 9% ,281 7% 7 France,559 8% 7,521 5% 0 0% ,081 7% 8 Chile 5,128 3% 6,404 5% ,532 4% 9 U.K. 3,650 2% 6,712 5% 0 1% ,362 3% Others 8,031 5% 7,096 5% 21 60% - 2 % 15,150 5% Total 175, , ,343 55% 45% 0% 0% 0% 100% HONG KONG TOTAL PORK IMPORTS (Metric Tons) and % of Total Supplier Offal % Frozen % Prep, prsvd % Chilled % Cured % TOTAL (1-3) % 1 Germany 33,780 34% 10,245 23% 1,280 4% % 45,319 26% 2 Brazil 10,612 11% 18,596 41% 2,110 6% - 0 0% 31,318 18% 3 U.S. 15,470 16% 3,223 7% 3,783 11% 19 14% % 22,614 % 4 Netherlands 12,761 % 4,572 10% 1,077 3% 0 0% 6 2% 18,416 10% 5 Spain 4,000 4% 1,111 2% 6,177 18% 1 1% 39 12% 11,329 6% 6 Poland 1,989 2% 469 1% 3,843 11% - - 6,301 4% 7 Italy 2,521 3% - 3,448 10% % 6,045 3% 8 U.K. 3,920 4% 472 1% 634 2% 7 5% 56 17% 5,089 3% 9 Belgium 2,936 3% 622 1% 279 1% - 1 0% 3,837 2% 10 Canada 2,011 2% 1,578 4% 210 1% 26 19% 2 0% 3,826 2% 11 Russia 1,402 1% 128 0% 2,256 7% - - 3,786 2% 12 France 901 1% 470 1% 2,272 7% 8 6% 10 3% 3,662 2% Denmark 1,735 2% 5 1% 154 0% - 2 1% 2,405 1% 14 Vietnam - 1,975 4% 31 0% - 0 0% 2,006 1% 15 Australia 755 1% 198 0% 62 0% 42 31% 6 2% 1,064 1% 16 Hungary 174 0% 92 0% 773 2% 0 0% - 1,040 1% 17 Ireland 433 0% 126 0% 477 1% - - 1,037 1% 18 Argentina 779 1% 37 0% 125 0% % 19 Sweden 570 1% 104 0% 87 0% % 20 Finland 81 0% % % Others 1,494 2% 456 1% 3,907 12% 32 24% 3 1% 5,893 3% Total 98,326 44,987 33, ,352 55% 25% 19% 0% 0% 100% Data source: Global Trade Information Services

10 Metric Tons Page 9 CHINA / H. KONG PORK & PVM IMPORTS -- Global AgriTrends' Forecasts -- PROJECTED PORK IMPORTS (Metric Tons) MONTHLY ANNUALLY CATEGORY Apr 14 May 14 Jun 14 Jul F 14/ Offal 85,852 91,278 89,631 90,722 1,170,928 1,211,564 3% Frozen 58,6 62,318 61,193 61, , ,309-4% Prep, prsvd 11,737 12,479 12,254 12, , ,011 1% Cured ,250 1,332 6% Chilled ,096 88% TOTAL 156, , , ,242 2,096,118 2,112,312 1% MONTHLY ANNUALLY COUNTRY Apr 14 May 14 Jun 14 Jul F 14/ U.S. 19,671 20,914 20,537 34, , ,5-15% Germany 30,168 33,411 31,496 26, , ,565 9% Denmark 20,607 21,909 21,514 18, , ,097 7% Spain 17,552 19,439 18,325 15, , ,066 9% Canada 12,304,082 12,846, , ,186-12% Others 56,069 57,498 58,537 55, , ,263 6% TOTAL 156, , , ,242 2,096,118 2,112,312 1% 225,000 China/HK Pork Imports and Forecasts 200, , Yr Avg 150, , ,000 Forecasts ,000 J F M A M J J A S O N D Includes variety meats MONTH Key Forecast Assumptions: High U.S. prices will reduce demand for U.S. pork over the summer. EU suppliers will likely have supply to back-fill due to the Russian ban. Offal demand should remain intact from the U.S. as China is the singular demand for key offal products. Abundant pork supplies to weigh on domestic prices and profits into. Imports remain competitive for processing and variety meat utilization. Market demand for frozen pork and offal will trend higher long-term. "Average" import volumes moving higher into the future. While Global AgriTrends believes that the data/information provided is accurate and complete, no warranty is made with respect thereto. Global AgriTrends shall not be liable for decisions or actions taken by the user based on the data/information.

11 China/Hong Kong Pork Imports Supplemental Charts & Analysis

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13 mt mt mt mt mt mt CHINA/HONG KONG PORK IMPORTS Pork Only (no variety meats) Pork and Variety Meats TOTAL 100,000 90,000 80,000 70,000 60,000 50,000 30,000 10,000 0 Pork Imports , , , ,000 50,000 0 Pork/PVM Imports All (less U.S.) 80,000 70,000 60,000 50,000 30,000 10,000 0 Pork Imports (Less U.S.) , , ,000 80,000 60,000 0 Pork/PVM Imports (Less U.S.) U.S. Only 45,000 35,000 30,000 25,000 15,000 10,000 5,000 0 Pork Imports (U.S. Only) ,000 80,000 70,000 60,000 50,000 30,000 10,000 0 Pork/PVM Imports (U.S. Only) Data source: Global Trade Information Services

14 RMB/kg Chinese Weekly Live Hog Prices Source: Average of Various Regional Reported Prices, USDA

15 $140 $120 $100 $80 $60 $40 $20 $0 -$20 Spread: China Carcass Price less U.S. Carcass Price, weekly Apr 18 -$5 Weekly Source: Average of Various Regional Reported Prices, USDA

16 US $/CWT $120 $100 $80 $60 $40 $20 $0 -$20 -$40 Spread: China Carcass Price less U.S. Carcass Price, monthly Apr: $(9) Monthly through 3rd week of Apr Source: USDA, Average of various regional Chinese hog prices, converted to carcass basis

17 Metric Tons (Imported) US$/CWT 60,000 50,000 China/HK Pork Imports (US only) and China/US Price Spread China/HK pork Imports (from the U.S.) Spread (CH$ less US$) $120 $100 $80 $60 30,000 $40 10,000 $20 $0 -$20 0 -$40 Monthly thru Mar, prices through 3rd week of Apr Source: USDA, Average of various regional Chinese hog prices, converted to carcass basis

18 Metric Tons US$/lb, equiv ,000 80,000 60,000 China/HK Pork Imports and China Pig Prices 0 (US$/lb carcass wt. equivalent) China/HK pork Imports (All Sources) China Pig Price, (US$/cwt, carc, equiv) $200 $180 $160 $140 $120 $100 $80 $60 $40 $20 $0 Monthly thru Mar, prices through 3rd week of Apr Source: China/H. Kong Customs, Average of Various Chinese hog price reportings, no variety meats incl.

19 $200 $180 $160 $140 $120 $100 $80 $60 $40 $20 $0 U.S. and China Pig Prices (US$/cwt, carcass equiv) U.S. Price, IA/MN carcass basis + 12% duty, % VAT, and $0.15/lb freight China pig price (converted to carcass basis) $168 $109 $200 $180 $160 $140 $120 $100 $80 $60 $40 $20 $0 Monthly through 3rd week of Apr Source: USDA, Average of various regional Chinese hog prices, converted to carcass basis

20 Pork Imports, MT Food Inflation, y/y chg ,000 80,000 60,000 - China/HK Pork Imports & Food Inflation China Food Inflation (vs. prior year) China/HK Pork Imports 25% 20% 15% 10% 5% 0% -5% Monthly through Mar Source: Average of regional reported prices, China National Bureau of Statistics

21 Pork Imports, MT ,000 80,000 China/H. Kong Pork Imports Pork Imports: All sources Pork Imports: from the U.S. 60,000 - Monthly through Mar Source: China/HK Customs