MercoPress. South Atlantic News Agency

Outbreak of African swine fever in China, a great opportunity for pork producers

Brazilian companies could sell an additional 200,000/300,000 tons of pork per year to China, said CEO of BRF Pedro Parente

Brazil is in a position to step up pork exports to China where an African swine fever outbreak has become a “transformational event” for the global meat industry, Pedro Parente, chief executive of Brazilian food processor BRF SA, said on Wednesday.

The increase would depend on plants in Brazilian states other than Santa Catarina in the south getting certified, he said at a conference. BRF only has one unit in Brazil authorized to sell pork to China, he added.

As a group, Brazilian companies could sell an additional 200,000 to 300,000 tons of pork per year to China, he said. The United States, once its trade dispute with Beijing is resolved, could also boost pork supplies to China by about 700,000 tons, he added.

But Parente said this only represents a small fraction of China’s potential demand as a result of the outbreak, which was first reported in August 2018.

China produces about 54 million tons of pork and demands about 56 million tons in a given year, with the difference supplied by imports.

“If Chinese production were to fall by 10%, which is a conservative estimate, this would mean the country would need an additional 5.5 million tons to meet current demand for pork,” Parente said. “Nobody in the world is really prepared for this,” he said regarding alternative suppliers for China.

Overall Brazilian pork exports to China totaled 154,500 tons last year, a 216% rise from 2017, according to data compiled by meat trade association ABPA. China is a key market with pork destined to that nation amounting to 24% of Brazil’s total pork exports, the data shows.

Global trade in pork totals about 8 million tons, with China accounting for some 20%, according to Parente. Parente noted BRF could benefit from the health crisis by selling more pork to China or by stepping up exports of other proteins to that country, especially chicken.

However, this is not an immediate opportunity because many Chinese producers are advancing slaughtering and increasing supply in the short term, Parente noted.