US- China trade war could boost UK pig production
The Us/chinese “tit for tat” trade war could have unexpected benefits for pig producers in the UK and the rest of Europe, an industry economist has predicted.
“President Trump’s imposition of tariffs on aluminium and steel imports to the US in the spring led to retaliation by the Chinese authorities, who raised import tariffs on US pigmeat at the beginning of April,” said Quality Meat Scotland’s senior economic analyst, Iain Macdonald.
“This left most shipments of US pork facing a 37 per cent tariff, compared to 12 per cent for other suppliers and by May, these tariffs had begun to bite”
Stating that China consumed almost half of the world’s pigmeat, Macdonald said that this sharply reversed the flow of the American product into the country:
“Having increased pork exports to China by 4 per cent year-on-year in the first four months of 2018, US shipments to China contracted heavily in May, down 46 per cent to 9,200 tonnes.”
He said that since then, the Chinese authorities had raised tariffs on US pork even further, to 62 per cent.
“This should support the competitiveness of UK and EU pork on the Chinese market in the second half of 2018, at a time when pigmeat production is expected to continue rising in the UK and across much of the EU.”
Macdonald added that despite a recent drop in market prices in China early in the year due to more than adequate supply, this had risen by 12 per cent between late May and the end of July, suggesting that supply had tightened and that imports might need to lift once again.
“If this is the case, UK and EU processors are wellplaced to supply them,” he added.
However, Macdonald revealed that on the home market, prime pig prices had started to come under some seasonal pressure, with GB prices falling slightly over the course of July, with prices moving from a 3 per cent year-onyear decline in March to be 9 per cent lower in July.
“Unfortunately for producers, this has come at a time when tight global grain supplies have pushed up feed costs significantly, squeezing margins,”
Latest slaughter statistics from Defra support this, said Macdonald, showing a 4 per cent year-on-year increase in the UK prime pig kill during April – June 2018.
“This has pushed up prime pigmeat production by 4.6 per cent.”