Global pork trade should pick up in the second half of 2022. Feed and energy costs are offering a break, but not quite relief. Feed input prices have softened in some markets but are expected to stay relatively strong for the rest of 2022. This will lessen the pressure on producers to some extent. However, price volatility in grains and oilseeds will bring extra management risks and challenges. Still, challenges to growth remain as African swine fever (ASF) continues to spread and inflation impacts trade policies.
Consumer demand remains strong in North America and is improving in the European Union, indicating seasonal movement more than a structural change. Japan, South Korea, and some other Asian countries, however, expect weaker demand in the near term due to rising inflation concerns, the slowing economy, and ongoing COVID-19 risks. China’s pork market is still subject to uncertainty around COVID-19 policy measures, which led to a marked decline in foodservice in the first half of 2022, but is looking more positive for the second half of the year. In Brazil, producers and processors are finding it difficult to pass on all the additional costs to consumers.
Global pork trade is expected to pick up from the low level in the first half of the year, mainly due to the expected rise in import demand from China. Pork prices in China have increased greatly in the past month and are expected to stay high for the foreseeable future, which supports imports.
The main highlights are:
- China: Surging hog prices due to tight supply and demand improvement. Policies are being introduced to stabilise prices and control inflation.
- Europe: Pig prices are supported by tighter supply and summer demand. Europe diversifies exports as volumes to China remain low.
- North America: Producers remain profitable on hog market strength and lower feed costs. Demand remains stable but is expected to weaken as the economy slows.
- Brazil: Farming margins are improving but still face challenges. Exports remain under pressure with a year-to-date drop of 9,8%.
- Southeast Asia: Pork prices have been rising in Vietnam due to tight supply. Imports are expected to increase in the near term.
- Japan: High prices are slowing domestic pork consumption. Pork imports remain strong.
Read more about this in an article entitled, “Global Pork Quarterly Q3 2022: ASF, Inflation, and Policies Challenge Growth While Trade Prospects Rise“, as published by Rabobank in July 2022.
The South African Pork Producers’ Organisation (SAPPO) coordinates industry interventions and collaboratively manages risks in the value chain to enable the sustainability and profitability of pork producers in South Africa.