According to merchants and economists, if Beijing bans imports from the European Union in reaction to the intensifying trade tensions, pork exporters from South America and the United States may gain market share in China.

Russia, which began exporting pork to China in February and is becoming a closer commercial partner of China, may also increase meat supplies. After the EU placed anti-subsidy taxes on Chinese-made electric automobiles, China’s commerce ministry said on Monday that it has launched an anti-dumping probe against imported pork and its by-products from the EU.

It will take time to see if there is any effect on EU exports. China has stated that the inquiry may take longer than a year to complete.

“Brazil, Argentina and the U.S. can export more pork and offal to China if exports from the European Union are restricted,” Pan Chenjun, a senior analyst at Rabobank in Hong Kong, said.

“If the anti-dumping tax is too high, than shipments from other origins such as the US, Brazil and Argentina will increase.”

However, in reaction to steel and aluminium tariffs, China has imposed 25% retaliatory taxes on American pork, according to the U.S. Meat Export Federation (USMEF).

According to Joe Schuele, vice president of communications for the USMEF, “it is unclear whether U.S. pork will still be at a tariff disadvantage compared to EU pork, as is the case today.”

According to spokesperson Jim Monroe, Smithfield Foods, a division of WH Group ltd, a company listed on the Hong Kong Stock Exchange, is aware of the effects of Chinese tariffs on American pork and would appreciate relief on that front.

As technology equities continued to rise, Monday saw the S&P 500 and Nasdaq close at yet another new high.

China buys pork from Europe, including components like feet, ears, and offal that are often primarily used for pet food rather than human consumption, so anti-dumping taxes might have a significant impact on Europe.

Pan, nevertheless, predicted that any influence on the Chinese market would be minimal.

“Restrictions on imports from the European Union don’t seem to have much of an influence on pricing and supplies on the local market. This is due to the fact that China imports only 5% of its entire offal and pork consumption, according to Pan.

According to USMEF’s Schuele, China may present more chances for American pig variety meats such as feet, stomachs, heads, and neckbones.

According to customs data, China imported $6 billion worth of pork in 2023, including offal.

It produces the majority of pigs worldwide and eats around half of all pork produced.

Although domestic hog prices had collapsed, this year’s glut has abated as producers killed fewer pigs to stimulate the market.

According to an animal feed dealer headquartered in Asia, any interruption in EU trade might benefit Brazil, which is China’s top agricultural trading partner.

The trader, who wished to remain anonymous due to lack of authorization to address the media, stated that Brazil will have no trouble gaining market share because of its fierce pricing competition.

Russia has room to develop as well; in three to four years, the National Union of Pork Producers in Russia hopes to account for 10% of China’s pork imports, according to Yuri Kovalev, the leader of the organisation.

Russia exported 4,260 metric tonnes of pork to China as of June 2. However, earlier this month, Sergey Dankvert, the chairman of the Russian agricultural watchdog Rosselkhoznadzor, stated that Russia might export up to 100,000 tonnes of pork to China by 2024.

At an investment symposium in St. Petersburg, Viktor Linnik, the chairman of Miratorg, one of Russia’s largest pig suppliers, stated that the agricultural holding was prepared to provide China with around 40,000 tonnes of pork by the end of the year.

A Shanghai meat merchant, who wished to remain anonymous, said that his business was in communication with exporters of pork from Russia.

(Adapted from Reuters.com)

Categories: Economy & Finance, Geopolitics, Regulations & Legal, Strategy