Pork industry relieved as China lifts ban

Glacier FarmMedia – Canadian Pork Council chair Rick Bergmann let out “a sigh of relief” Tuesday, after Prime Minister Justin Trudeau announced exports will continue to China roughly four months after pork and beef products shipments were blocked.

Since June 25th, meat shipments to China had been “suspended” after falsified paperwork was discovered, prompting Canadian and Chinese authorities to launch an investigation into the matter.

“It had a major impact because the door was closed, and for us China is a significant market. They are our third largest market that we pursue, so the impact was very significant,” said Bergmann, saying the sector calculated the country-wide cost to the sector to be roughly $10 million a week, which would bring the total cost to roughly $380 million.

Canada continued to import beef and pork to China. Despite the “import ban” being announced in June, China bought 219,675,623 kg of pork in August.

January to August 2018 saw $322,295,150 worth of Canadian pork to China; it increased to $491,149,969, or 52.39 per cent, this year.

Bergmann downplayed any suggestion there wasn’t real impact resulting from the suspension, saying there was, “A very significant loss that has been incurred here.”

The Pork Council noted the timely nature of the decision: Chinese pork supplies have been nearly wiped out as a result of an African Swine Fever (ASF) outbreak.

(The losses to the Chinese swine herd from ASF are roughly ten times the size of the entire Canadian herd).

In 2018, Canada’s pork exports reached nearly $4 billion, with $514 million of that – nearly 13 per cent – resulting from China.

Agri-Food Economic Systems’ Al Mussell said the lifting of the ban can’t be separated from African Swine Fever’s impact in China and throughout Asia, or the “surge in demand for meat that resulted from it.”

While a direct market to China largely evaporated as a result of the ban, Canadian producers had been backfilling in markets with continued direct access.

“It’s a very different thing if you can have a direct route to customers, and reconnect with past customers. I think that is probably a big benefit, generally speaking, for the industry,” he said.

Canadian delegates – including some from the pork and meat council – will be in China next week to try and strengthen relations with Chinese importers.

“We know there is opportunity in Asia, and that’s why we’ve been pushing the current government and previous governments to make sure we have access,” said Fawn Jackson, senior manager of government and international relations for the Canadian Cattlemen’s Association.

Mussell pointed to an opportunity for Canadian producers as a result of the ban being lifted, noting China still has duties on U.S. products ¬¬- for pork and beef products they range between 50 and 80 per cent.

“We’re going to have that access without the duties now. So to some extent that puts (Canada) at an advantage compared to the U.S.,” he said, noting that needs to be tempered because it is likely some Chinese importers have been given exemptions from the duties.

The small opportunity that presents is a small sliver of optimism in an otherwise chaotic international trade environment that has Canada caught in the middle of an ongoing trade dispute between its two largest trading partners, China and the United States.

Tensions between Canada and China deteriorated significantly after Meng Wanzhou, chief financial officer of China’s Huawei Technologies Co. was arrested on a U.S. warrant in Vancouver during the winter of 2018.

China then arrested and charged two Canadian men for allegedly spying, before stopping imports of Canadian canola seed earlier this year due to concerns over pests.

Canada announced in July plans to regain Chinese confidence in its meat export systems, suggesting it was different than the dispute over canola (which is currently being disputed at the World Trade Organization and is the subject of ongoing consultations).

“The one thing that the whole supply chain can contribute to having this never happen again is to always ensure the product we have is a quality product. We have that,” said Bergmann, who added the industry has to “make sure at all the levels the documentation is correct.”

News of the suspension being lifted caught few within the industry by surprise, as industry and government officials had been working with the Chinese government behind the scenes to find a resolution. The Canadian Meat Council joined the Pork Council, and others familiar with the file, in expressing appreciation to the federal government, particularly Canadian ambassador to China, Dominic Barton.

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