China urbanization has pork exporters drooling

Meat consumption increasing | The country will account for almost 20 percent of the world’s pork imports by 2022

BANFF, Alta. — China’s urban population outnumbers its rural residents for the first time in its history.


It’s one of the reasons why pork processors put the country ahead of some traditionally larger export markets.


In addition to its population, which has exceeded one billion, China’s increasingly urban residents are wealthier than their rural counterparts, attendees at the recent Banff Pork Seminar were told. 


Pork is already the most consumed protein in China.


“This is the marketplace that collectively we can all grow,” Maple Leaf’s Troy Warren said. 


China is already a major customer for Canadian pork, but producers and processors require easier access to the country, said Warren. 


Lengthy inspection periods inhibit the sale of fresh product from Canada, he added.


“Today, we serve a tremendous amount of frozen pork, but the real value added for all of us in this country is in the fresh pork markets around the world,” said Warren. 


Smithfield Foods, the largest pork producer and processor in the United States, was acquired last year by a Chinese processor, Shuanghui International.


Economist Steve Meyer of Paragon Economics called the purchase a positive development that shouldn’t affect opportunities for Canadian exports. 


“It’ll probably increase the rate of growth and exports to China, but I don’t see that it’s going to take market share from anyone,” said Meyer. 


“I think that it’s going to be a net increase for all imports going into China. I don’t think Canada is put at any big disadvantage by this deal.”


Meyer presented U.S. Department of Agriculture projections that show China will account for almost 20 percent of the world’s pork imports by 2022. It is expected to account for more than half of worldwide imports, along with imports from Japan, Hong Kong and South Korea.


“We’ve had this focus for China, China, China for many years and there’s no question that it’s important, but we have to look at Asia as a whole,” said Meyer. 


China, the United States, Japan and Russia are the largest markets for Canadian pork, but regulators and new competitors have presented challenges in every market. 


Country-of-origin labelling has hampered business in the U.S., exports to Japan have fallen and issues with the feed additive ractopamine have restricted access to Russia and China. 


“We’ve had a lot of trade issues. We still have a lot of trade issues,” said Warren. 


“As a country that exports 50 percent of its pork, we can’t afford to have trade issues.”


Canada has long been a net exporter of pork, but calls for market protection and advancement come at the same time as a major shift in the domestic market, in which Canada has become a net importer of pork from the U.S. 


Warren said Canadian products still line grocery store aisles, but meat that goes on sale is likely from the U.S. 


“We have conditioned consumers to buy pork really, really cheap and wait for features,” said Warren. 


“And way more of the volume is shifting to features.… As much as I’d like to stop the American pork coming in here, I can’t supply a Loblaws feature when they sell something at $2.99 a pound.”


The Canadian government is pursuing free trade agreements with the Trans Pacific Partnership and South Korea, while some Canadian packing plants have been able to remove ractopamine from their meat, including Quebec-based Olymel.


“Today we have an OK relationship with China, I would say,” said Warren. 


“It’s a huge opportunity market for us … but trade terms aren’t totally known. Sometimes they allow Paylean (ractopamine) in. Sometimes they don’t. Today they’re back in the ‘don’t’ phase. When they need pork, they seem to turn a blind eye to this issue.”


Warren said China and Russia have used ractopamine restrictions as non-tariff barriers to restrict trade, but the industry needs to be on the same page on the topic. 


“As an industry, we need to decide what we’re going to do with this ingredient,” he said.

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