Rival pork exporters could benefit from China-EU trade tensions (updated)

WH

17/06/2024 21:08

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      Brazil, US, Argentine meat suppliers could benefit
    

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      Russia also keen to boost share in China's meat market
    

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      No immediate market impact expected
    

  
 (Adds U.S. comments paragraphs 7-9, 13)
    By Naveen Thukral
       SINGAPORE, June 17 (Reuters) - Pork suppliers from South
America and the U.S. could gain market share in China if Beijing
restricts imports from the European Union in response to
escalating trade tensions, traders and analysts said.
    Russia, increasingly a close trading partner of China that
started exporting pork to China in February, could also step up
meat shipments.
    China's commerce ministry said on Monday it had opened an
anti-dumping investigation into imported pork and its
by-products from the EU, after the bloc imposed anti-subsidy
duties on Chinese-made electric cars.
    Any impact on EU exports will take time to emerge. China has
said the investigation could last more than a year.
    "Brazil, Argentina and the U.S. can export more pork and
offal to China if exports from the European Union are
restricted," Pan Chenjun, a senior analyst at Rabobank in Hong
Kong, said.
    "If the anti-dumping tax is too high, than shipments from
other origins such as the US, Brazil and Argentina will
increase."
    The U.S. Meat Export Federation (USMEF) noted U.S. pork
faces retaliatory duties of 25% in China in response to steel
and aluminum tariffs, however. 
        "It is unclear whether U.S. pork will still be at a
tariff disadvantage compared to EU pork, as is the case today,"
said Joe Schuele, vice president of communications for the
USMEF. 
  
        Smithfield Foods,  a unit of Hong Kong-listed WH Group
ltd  0288.HK , is familiar with the impact of Chinese tariffs on
U.S. pork and would welcome relief on that front, spokesman Jim
Monroe said. 
    Anti-dumping duties could hit Europe hard as China's pork
purchases from Europe include parts such as feet, ears and offal
that tend to only be used for pet food rather than human
consumption in Europe. 
    Pan, however, said any impact on China's market would be
limited.
    "We don't see much impact on the local market in terms of
supplies and prices if imports are restricted from the European
Union. This is because China's imports of pork and offal are
just 5% of total consumption," Pan said.
    USMEF's Schuele said there could be further opportunities
for U.S. pork variety meats in China, including feet, stomachs,
heads and neckbones. 
    
    LEADING CONSUMER AND PRODUCER
    In 2023, China imported $6 billion worth of pork, including
offal, customs data showed.
    It is the world's leading pig producer and consumes around
half the world's pork.
    Domestic hog prices had plummeted, but oversupply has eased
this year as farmers slaughtered fewer pigs to boost the market.
    One Asia-based trader who deals in animal feed said Brazil,
China's leading agricultural trading partner, stood to gain from
any EU trade disruption.
    The trader, who asked not to be named because they were not
authorised to speak to the press, said Brazil was very
competitive in terms of pricing and would be able to easily
increase market share.
    Russia also has potential for growth, and according to Yuri
Kovalev, head of the country's National Union of Pork Producers,
it wants a 10% share of China's pork imports within three to
four years. 
    As of June 2, Russia's pork shipments to China totalled
4,260 metric tons, but Sergey Dankvert, the head of
Rosselkhoznadzor, Russian agricultural watchdog, said earlier
this month Russia could export up to 100,000 tons of pork to
China in 2024.
    The head of Miratorg, one of Russia's major pork suppliers,
Viktor Linnik told an investment forum in St. Petersburg that
the agricultural holding was ready to supply China with about
40,000 tons of pork by the end of the year.
    One meat trader in Shanghai, who asked not to be named, said
his company was in contact with Russian pork exporters.    

 (Reporting by Naveen Thukral; additional reporting by Olga
Popova in Moscow, Karl Plume and Tom Polansek in Chicago and
Beijing newsroom; editing by Barbara Lewis and Marguerita Choy)
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