China livestock outlook and implications for meat import demand
25 February 2016
BMI’s latest China Livestock Outlook Report for Q2 2016 highlights the challenges facing China's livestock sector in the medium term and the implications for import demand for both beef and pork.
BMI Research sees slowing economic growth as having some knock-on effects on meat demand in China. This is having an impact on production growth, which BMI anticipates will remain below par in the coming few years. However, the demand outlook for the longer term is more positive as the increasing urbanisation and affluence of consumers will boost overall demand for meat.
The modernisation of the pork and poultry industries, further encouraged by the reforms and strategic objectives outlined in the government’s recent 13th Five Year Plan, will create opportunities to develop the supply chain and improve cold chain logistics.
China is expected to record a surplus of poultry meat for Q2, but BMI forecasts that China’s deficits for pork and beef will balloon in coming years, leading to an increase in imports of these products in 2016 and beyond.
- China's pork production decreased in the 2014-15 fiscal year (FY) for the first time in four years, as lower profit margins and stricter environmental policies saw a significant proportion of “backyard” pig farmers exit the industry. The latest US and China Hog Report by the Steiner Consulting Group confirms that China’s breeding herd numbers have being declining for 29 consecutive months. This is expected to limit pork supplies at least through the first half of 2016 and underpin higher prices over the coming months, in spite of lower feed prices. BMI forecasts modest pork output growth (+2.3%) for 2015-16 FY.
- BMI forecasts China’s beef production in 2015-16 FY will see modest growth of 1.0%, partly driven by low milk prices encouraging farmers to slaughter their dairy cattle to benefit from comparatively stable beef prices.
- Chicken production in China is forecast by BMI to see slow growth in 2015-16 FY (+0.6%) due to ongoing impacts of avian flu.
- Whilst BMI did not cover sheepmeat production, Gira has recently forecast that China’s sheep flock will see modest growth in 2016 (+3.2%) with a similar rate of growth predicted for sheepmeat production (+3.3%). 2014-15 FY saw the first drop in net imports (-25%) and although 2015-6 FY will see some recovery, subdued demand for sheepmeat imports will continue.
Join myMLA today
One username and password for key integrity and information Systems (LPA/NVD, NLIS, MSA & LDL).
A personalised online dashboard that provides news, weather, events and R&D tools relevant to you.
Customised market information and analysis.
Already registered for myMLA?