Chinese pork consumption
continues to grow
China is keeping a close eye on pork imports while
transiting from small-scale to large-scale pig production.
By Jean-Pierre Garnier
China’s pork industry produces and
consumes about half the world’s pig meat
and it accounts for a large chunk of the
❱❱ The Chinese pig sector
faces a formidable
challenge of converting
to large-scale production to offset
the dramatic exodus of small-scale
producers through subsidies. ❰❰
— Jean-Pierre Garnier
At the moment, the Chinese government
is successfully managing the transition
of the economy from investment and
export-led to a more balanced one where
consumption plays a larger part. It is also
successfully combating inflation, which
fell from a peak of 6.5% in August to a more
manageable 5.5% in October 2011.
Fresh pork is the largest single item in
the “consumer basket” used to calculate
the price index and an increase in price is
responsible, to some extent, for the rise in
inflation. On the positive side, wages are
rising faster in rural areas reducing the gap in
incomes between rural and urban areas.
On the negative side, inflation has hit
low wage earners, many of whom claim
they cannot afford to buy pork anymore. A
housing bubble in the largest cities and the
explosion of investment credit also cast a
shadow on what is a uniquely successful
experiment in lifting hundreds of millions
out of poverty.
Development of the pork sector
Chinese pig production has increased
considerably over the past 20 years at an
average rate of 2.1% per year. However,
the average Chinese pig farm remains
small, with only nine sows.
There are no clear estimates of
the number of backyard producers,
although some estimate about 50 million
pig producers. Approximately 92% of
pig production is concentrated in 12
provinces. The Yangtze River region alone
accounts for 42.6% of the pig population,
Northern China a further 22.5% and the
Southern coastal region 16.8%.
Pigs compete with people in these
densely populated areas and there is clear
political will to move pig production to
less populated regions. The Chinese pig
sector faces a formidable challenge of
converting to large-scale production to
offset the dramatic exodus of small-scale
producers through subsidies.
Modern pig production now
accounts for around 30% of the total.
Fast-growing concerns have emerged,
among them Shuangui, Yurun, Zhongpin,
Jinluo, Tangreshen, Gaojin and Delisi.
The revolution that is taking place in
production is also affecting processing.
The government plans to cut the number of
abattoirs from 20,000 to 3,000 by 2020.
The production of processed pork
products is progressing fast and now
accounts for 13% of pork usage with a
ratio of 45% Chinese-style products and
55% Western-style products, mainly
frankfurters and ham. The high rate of
growth of processed meat products sales
is expected to continue in the foreseeable
future. Pork processors are also becoming
perceptive and more marketing-led.
In the short term, pig wholesale and
retail prices have come back about 10%
from their summer high at around 24.28
Yuan/kg (€ 2.84 /kg – US$3.80 /kg) to mid-November, although they are still nearly a
third higher than a year ago. There is every
indication that supplies will remain tight
until next spring.