Asian pork demand slows

U.S. competitiveness expected to improve relative to Europe

By RICHARD SMITH

For the Capital Press

TOKYO -- Pork export growth to the major East Asian markets should be slow next year because of weak demand.

In Japan, imported pork is becoming less price-competitive. This year, because of the stronger yen and an increase in global pork production, Japan has been able to import pork at a relatively low price, said Tatsuo Iwama, executive director of the 30-member Japan Meat Traders' Association.

But because of the Midwest drought, which resulted in high feed prices, U.S. producers are taking many sows and meat hogs to market to reduce feed costs, he said.

The resulting pork shortage will bring up imported pork prices. "We foresee an import reduction in 2013," Iwama said.

A recovery this year in Japan's total hog slaughter and national output has put more competitively priced fresh and chilled domestic cuts into retail distribution, and this trend is expected to continue into 2013.

Abundant stocks of low-priced domestic chicken reportedly displaced retail purchases of both table pork and beef, with a similar scenario played out in food services, according to the USDA Foreign Agricultural Service 2012 Japan Livestock and Products Annual Global Agricultural Information Network Report published Oct. 2.

Still, Joel Haggard, vice president of the U.S. Meat Export Federation for Asia, said U.S. competitiveness should improve against sharply rising pork prices in Europe.

Potential gains for U.S. chilled pork can be seen in Japan's retail sector, especially as higher grain prices affect Japanese producers' production costs, he said.

"We are forecasting a slight increase in U.S. pork exports to Japan next year of 0.5 to 1 percent," Haggard said.

In South Korea, the wholesale domestic pork price fell to 2,675 won ($2.45) per kilo as of Sept. 28, one-third of the June 8 price, Korea Institute for Animal Products Quality Evaluation figures show.

South Korean consumers prefer to buy domestic pork when possible, said Bo-Hee Lue, secretary-general of the 80-member Korea Meat Import Association.

"If domestic prices continue falling, demand for imported pork will be diminished," he said.

But Haggard believes the market will start to stabilize next spring, and the growing competitiveness of imports, especially from the U.S. and the EU as free trade agreement duty reductions continue, will become more manifest.

"This bodes well for U.S. exports to Korea, which we forecast will increase by 3 percent next year," he said.

In China, concerns over low prices and oversupplies of swine and pork have triggered producers to slaughter some of their sow inventory, so 2013 hog crop production is expected to increase by only 1 percent to 690 million head. Total 2013 pork consumption is forecast to increase modestly by 2 percent to 53.1 million tons, says the 2012 China Livestock and Products Annual GAIN Report, published September 23.

The slower pace of increases in pork production will likely drive imports by 5 percent to 840,000 tons, with the U.S. as the largest supplier, accounting for 44 percent of China's total imports, the GAIN report said. Haggard concurs.

"I'll give an estimate of 5 percent growth in direct (U.S.) exports to China," he said.