Pig producers could benefit from trade dispute

Meat: QMS says dispute highlights importance of successful trade deal after Brexit

Scotland’s meat promotion body Quality Meat Scotland (QMS) has predicted that the trade dispute between China and the United States could prove beneficial to EU pig exporters.

There has been an 8% fall in US farm gate prices of pig meat in the week since new trade tariffs introduced by US president Donald Trump came into force and China retaliated with tariffs on a list of 128 products which include pig meat.

Chinese importers now have to pay a 37% or 45% tariff on top of the price charged by the US exporter, compared to 12% or 20% previously.

Affected lines include some fresh cuts of pork plus almost all frozen pork and frozen pig offal.

Latest available trade statistics show that China was the fifth-largest pork export market for the US in the first two months of 2018, accounting for 4.9% of US pork exports by volume and 7.1% by value.

Meanwhile, EU shipments to China were down 10% in January and February, though they did still account for 37% of EU exports.

QMS economics analyst Iain Macdonald said: “If EU exporters can regain market share in China from the US, this would be likely to place some upwards pressure on farm gate pig prices across the EU.

“Given that the EU Commission has forecast EU pig meat production will be 0.8% above 2017 levels and 2.6% ahead of its 2013-17 average, this trade dispute could come at a good time for EU pig producers.”

QMS points to the trade dispute as a good illustration of the importance to Scotland’s red meat industry of trade agreements being successfully negotiated as part of the Brexit process.

Mr Macdonald said failure to build strong trading relationships could result in significant trade volatility with agricultural products also facing knock-on effects from measures aimed at unrelated industries.

EU pig producers could be in line for a sales boost. Picture: Alan Richardson.