China's volatile pork industry encourages more imports
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WASHINGTON, Feb. 9- The USDA Economic Research Service (ERS) found that imported pork is becoming more competitive in China as Chinese pork production costs rise and animal disease outbreaks, environmental threats, and food safety concerns constrain growth of China's hog industry.
"China's Volatile Pork Industry" is the title of the ERS report, which emphasized the need for U.S. farmers, business leaders and policymakers to understand the volatile nature of China's pork industry.
Prices, hog inventories, and pork output in China fluctuate from year to year in response to various factors that influence the market, and China's imports of pork tend to rise when Chinese hog prices are high, according to the ERS study.
“Extensive policy intervention by the Chinese government has contributed to consolidation in the country's pork industry but has not stabilized the market,” states the report. “Imported pork is becoming more competitive in China as Chinese pork production costs rise and animal disease outbreaks, environmental threats, and food safety concerns constrain growth of China's hog industry."
China is expected to grow as a pork importer as it becomes more difficult for the country to sustain itself in the pork industry due to higher feed costs and shrinking land space.
Also, interregional shipments of pork within China are limited by lack of reliable transportation and temperature-controlled storage. Chinese restaurant chains, hotels, and other buyers who demand pork with high and consistent quality are important potential customers for imported pork, the report concludes.
“Stricter regulatory enforcement in the United States, greater investments in animal housing and manure handling, wider dissemination of technical expertise, and closer coordination between producers and processing companies help U.S. farmers produce pork with less of an impact on the environment, fewer food safety incidents, and fewer disease outbreaks than in China.”
However, the study also cited numerous reports that Chinese officials have been wary of foreign investment in the pork industry because officials feared losing “guidance power” over the industry.
“Strong resistance to pork imports in China can disrupt trade and affect exporters,” warned the report. China lowered tariffs on pork after its accession to the World Trade Organization, but pork imports still face resistance.”
Find the entire study here, http://www.ers.usda.gov/Publications/ldp/2012/01Jan/ldpm21101/ldpm21101.pdf
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