Market intelligence report

Swine Meat

Worldwide Pork Stories

One year after emerging in China, African

Swine Fever (ASF) is driving Chinese pork

prices to record highs and causing an

extensive reduction in pork supply.

By the end of 2020, China’s total swine

herd is forecast to decline to 275 million

head, down nearly 40 percent since the

beginning of 2018.

Lower hog supplies will drive a substantial

decline in China’s pork production – down

14 percent in 2019 and down 25 percent in

2020.

Production growth is likely to be uneven

among farm-size. Large integrated

producers have already announced

ambitious expansion plans and are

generally well-capitalized

Production is forecast 4

percent higher in 2020 on

increased slaughter and heavier

carcass weights.

Exports are up 11 percent due to

robust demand from China,

improved sales to Mexico, and

steady demand from Japan and

Korea.

Although retaliatory tariffs

remain in place on U.S. pork in

China, tariff exemptions and

high Chinese pork prices are

expected to boost sales in 2020.

Shipments are expected to

accelerate to Mexico due to the

repeal of retaliatory tariffs.

China USA

With strong biosecurity and limited ASF outbreaks, South Korea’s pork production

will be minimally affected.

Greater production and imports for all three meats will spur total per capita

consumption 3 percent higher.

Prospects for Indian swine meat exporters in 2020

Indian swine meat export forecasts are solid and exports are expected steadily increase

over the next few years. ASF breakout in China and EU countries and subsequent ban on

EU pork exports by several countries opens doors for Indian swine meat exports and this

opportunity can be tapped by the exporters. The Russian Federation, for example, imposed

a ban on pork imports originating from the European Union following an outbreak of

African Swine Fever (ASF) in Eastern Europe. Chinese swine herd is expected to decline by

40% and recovery is unlikely in 2020.

Source: Trademap

South Korea

USA and China seem to be the largest importer of Swine meat followed by Australia. European Union member countries and Mexico remained consisted importers of Swine Meat in the world

Import growth highest in case of japan, South Korea, China and USA:

prospective markets for 2020

Source: Trademap

Trend of Indian Swine Meat Exports in Existing Markets (HS Code: 020329)

International Demand to Outstrip Global Supply

Global production is forecast down 10 percent in 2020 due to the impact of African Swine

Fever (ASF) on swine herds in several major producing countries. Most of the reduction in

global production is due to a 25-percent decline in China pork production. Production is

also lower in the Philippines (-16 percent) and Vietnam (-6 percent). South Korea has

reported 14 cases of ASF thus far, but outbreaks have been contained and no production

impact is expected at present. In Europe, weak domestic demand, ongoing ASF in some

Member States, and environmental regulations are limiting expansion, but production is

forecast 1 percent higher on strengthening exports. Most major pork exporters will boost

production in 2020 due to rising global import demand. Production is up robustly in the

United States (4 percent) and Brazil (5 percent).

Global Exports of Swine Meatto increase in 2020

Global exports are forecast 10 percent higher to 10.4 million tons. China imports are

forecast 35 percent higher and account for 35 percent of global pork imports. The

Philippines imports are also forecast 32 percent higher due to disease impact on domestic

supplies. Outside of ASFaffected countries, demand is expected to be muted by higher

global prices. Many pricesensitive markets are expected to reduce imports of pork on

strong competition from ASFaffected buyers. EU exports are up 13 percent and Brazil up 20

percent mostly on growth in exports to Asia. In contrast, Canada’s exports are down slightly

as restrictions from China limit opportunities for growth.

Source: USDA Foreign Agricultural Service

16%

16%

14%

9%

9%

8%

5%

4%

20%

Share in Global Pork Exports

USA

Germany

Spain

Denmark

Canada

Netherlands

Belgium

Brazil

RoW

Source: USDA Foreign Agricultural Service

China’s imports from the United States are up 47 percent this year, but retaliatory tariffs are

limiting demand from many buyers in China. This may offer India an opportunity to fill this

gap in China.

Global Consumption of Swine Meat to increase in 2020

The outlook for global swine meat consumption is positive, largely underpinned by growth

in population and household wealth in developing markets.Global consumption of swine

meat is forecasted to rise in coming years. This combined with the threat of African Swine

Fever deemed to wipe out one fourth of swine population from the world provides good

opportunity for Indian exporters in this industry.

Global Import Trend of Swine Meat (HS Code: 020649)

Global Import Trend of Swine Meat (HS Code: 020329)

Global Import Trend of Swine Meat (HS Code: 020321)

Swine meat is the second most popular meat source and likely to retain this

position in coming years.

European and North American markets are major consumers of swine meat.

Countries like Angola, Iraq, UAE, Ukraine, Vietnam have stepped up their meat

imports opening up new opportunities in these markets.

A decline in 2018 consumption is declining in most cases owing to Chinese and

eastern European breakout of ASF which led to low supply and higher prices.

Howeverwe believe as supply increases and prices come down, swine meat will

maintain its demand.

Global Opportunities and Challenges for India

African Swine Fever –Breakout of the African Swine (ASF) which has no cure has

resulted in significant decline in the Chinese pig herd and hence creates a gap in the global

swine export market that Indian exporters may fill.

National Animal Disease Control Programme– Many countries are apprehensive

aboutmeat imports from India on the grounds of ‘Foot and Mouth Disease (FMD)’. Present

Indian government has started National Animal Disease Control Programme (NADCP) for

eradicating FMD with 100% funding from Central Government.

Global Trade Policies offer a challenge –Trade policies remain a major factor

impacting the dynamics in world meat markets and hence the projection and

implementation of various trade agreements over the outlook period could eventually

diversify or consolidate meat trade considerably. Specifically, several Pacific Ocean

countries have completed negotiations for a Trans-Pacific Partnership, and its

implementation may provide increased access to selected Asian markets to suppliers

located in those countries.

Source: Meat and Livestock Australia

Source: OECD-FAO Agricultural Outlook 2019-2028

0

20

40

60

80

100

120

140

Pork Poultry Beef Sheepmeat

Global Meat Consumption (in Mn Tonne cwt)

2018 2022

0

5

10

15

20

25

30

20

16

-18

20

28

20

16

-18

20

28

20

16

-18

20

28

20

16

-18

20

28

20

16

-18

20

28

20

16

-18

20

28

20

16

-18

20

28

North America

Oceania Europe Latin America

and Caribbean

World Asia and Pacific

Africa

Per Capita Pork Consumption by Region

Competitive position of Indian Swine Meat vis-à-vis global players

Crunching the numbers, the hog population of India had grown steadily over the last 50

years before dipping and holding just above the 10 million mark in 2018. Approximately 63

percent are raised in the poorer, less industrialised north-eastern region, with 70 percent

reared under traditional low-input, demand-driven smallholder production systems, where

animals are fed on available grains, vegetables, food scraps and kitchen waste.India’s pork

industry is slowly shedding its stigma, and its status in Indian culture is gradually

improving. While still dominated in numbers by the poorer economic classes, the scenario

is changing, and commercial pig farming is becoming a more commonplace and

acceptable occupation. As India moves to a more viable production of pigs through cross-

breeding of exotic stock, it is imperative that technology is utilised, sound herd

management systems are adhered to and healthy, clean, disease-free environments

become the rigid standard. However, India needs to focus on rearing genetically superior

quality animals, to enhance the farmer’s potential and meet customer’s demand for safe

and healthy meat.

Opportunities for India

Considering the growing import demand of Swine meat in these identified countries,

potential for India remains highest in case of China followed by Hong Kong, Philippines,

Mexico and Japan in HS 020649. In HS code 020329 the most gap remains in Japan

followed by South Korea and China.

-2,00,000 4,00,000 6,00,000 8,00,000

10,00,000 12,00,000 14,00,000 16,00,000

Potential for Export of Swine Meat (HS 020649) from India in 2020Opportunities

for India

estimated on

the basis of

World import of

Swine meat

versus the

actual export

from India.

Importers

Value imported in 2018

(USD thousand)

Import from India

Gap

China

1,516,837 -

1,516,837

Hong Kong, China

770,119 -

770,119

Philippines

237,192 -

237,192

Mexico

98,306 -

98,306

Japan

70,168 -

70,168

Korea, Republic of

56,107 -

56,107

Viet Nam

41,160 -

41,160

Taipei, Chinese

32,386 -

32,386

Côte d'Ivoire

31,775 -

31,775

United States of America

29,641

-

29,641

Denmark

27,938 -

27,938

France

25,828 -

25,828

Netherlands

20,383 -

20,383

Italy

16,015 -

16,015

United Kingdom

15,093 -

15,093

Angola

14,884 -

14,884

Can India sustain in its export markets for Swine Meat?

Competition analysis for India - Existing Markets (HS Code 020329)

Country L2 Player Market Share %

CIF Average

Tariff FLP

USA India 0 5403 0% 5403

USA Poland 28.4 3,183 0.20% 3189.366

USA Denmark 18.8 3,961 0% 3968.922

USA Canada 15.2 2,355 0% 2355

USA Mexico 10.2 3417 0% 3417

Bhutan India 93.3 2,880 0% 2880

Bhutan Singapore 6.7 4,000 30% 5200

Sri Lanka India 0.7 3,000

30% 3900

Sri Lanka Belgium 42.7 2800 30% 3640

Sri Lanka Poland 39.2 3,600 30% 4680

Sri Lanka Netherlands 16.6 3455 30% 4491.5

Germany India 0.01 3,000 22% 3669

Germany Spain 30.4 2,957 0% 2957

Germany Netherlands 15.4 3,531 0% 3531

Germany Denmark 9.8 4066 0% 4066

Germany Austria 8.6 3,499 0% 3499

How feasible will it be for Indian Swine Meat to enter newer growing markets?

Competitiveness analysis for India - Potential Markets (HS Code 020329)

Top 15 Destination Countries

India's share in

Destination Country's Imports

Unit Price (India) -

USD/tonne

Average Tariff

(India) - in %

Final Landing

Price India (USD/tonne)

Competing Countries in

Newer Destinations

Share of Competing Country in

Destination Country's Imports

Unit Price

Average tariff

Final Landing

Price

Japan 0 NA 31.90% NA

USA 28.30% 4759 31.90% 6277.121

Canada 24.00% 4771 0.40% 4790.084

Spain 12.10% 4787 0.40% 4806.148

Denmark 11.60% 4751 0.40% 4770.004

Mexico 9.70% 4772 0.40% 4791.088

Korea, Republic of

0 NA 24.40% NA

USA 30.40% 2,681 1.50% 2721.215

Germany 20.90% 3084 5.00% 3238.2

Spain 5.00% 3121 5.00% 3277.05

Chile 7.40% 4054 0.50% 4074.27

Canada 6.80% 3010 11.70% 3362.17

China 0 NA 12.00% NA

Brazil 23.50% 2,144 12.00% 2401.28

Spain 21.10% 1,789 12.00% 2003.68

Germany 8.00% 1793 12.00% 2008.16

Denmark 7.00% 2035 12.00% 2279.2

Canada 6.20% 1478 12.00% 1655.36

Hong Kong 0 NA 0.00% NA

Brazil 38.00% 2,228 0.00% 2228

China 26.00% 4546 0.00% 4546

USA 19.80% 2566 0.00% 2566

Netherlands 9.00% 3077 0.00% 3077

USA 8.00% 3695 0.00% 3695

Australia 0 NA 24.00% NA

USA 41.50% 2,542 0.00% 2542

Denmark 8.00% 3041 0.00% 3041

Netherlands 5.30% 2990 0.00% 2990

Canada 2.70% 2642 0.00% 2642

Ireland 1.90% 3204 0.00% 3204

UK 0 NA 22.30% NA

USA 41.50% 2,542 0.00% 2542

Denmark 27.80% 3,041 0.00% 3041

Netherlands 16.50% 2,990 0.00% 2990

Canada 7.70% 2,642 0.00% 2642

Ireland 4.60% 3,104 0.00% 3104

Romania 0 NA 22.30% NA

Germany 24.00% 1,845 0.00% 1845

Spain 22.00% 2,551 0.00% 2551

Italy 14.00% 2,142 0.00% 2142

Hungary 10.00% 1,775 0.00% 1775

Poland 10.00% 1906 0.00% 1906

Mexico 0 NA 20.00% NA

USA 77.00% 2,251 0.00% 2251

Canada 14.00% 2,025 0.00% 2025

Spain 4.50% 2,158 20.00% 2589.6

Germany 7.00% 2,506 20.00% 3007.2

Chile 0.60% 1,935 0.00% 1935

Taipei 0 NA 20.00% NA

Netherlands 32.80% 2,251 0.00% 2251

Ireland 18.70% 2,025 0.00% 2025

Germany 16.10% 2,158 0.00% 2158

Belgium 9.50% 2,506 0.00% 2506

United Kingdom 5.90% 1,935 0.00% 1935

Colombia 0 NA 20.00% NA

Ireland 26.10% 2,251 0.00% 2251

Netherlands 14.00% 2,025 0.00% 2025

Argentina 9.50% 2,158 42.30% 3070.834

Poland 6.70% 2,506 0.00% 2506

France 6.60% 1,935 0.00% 1935

Strategy to promote Indian Swine Meat exports

India needs to work on its quality for Swine meat and start rearing good quality animals

to increase its competitiveness in the global swine markets. India also needs to get the

FMD-free status which is a major requirement for most of the high value markets like

Japan, USA, China and EU countries.

The African Swine Fever (ASF) is likely to wipe out one-fourth of the pig populationfrom

the face of the earth which will pose significant food security issues in the world. This

outbreak in China and Eastern Europe has led countries like Russian federation ban

imports from EU countries while China’s retaliatory tariffs on US pork imports coupled

with rising pork prices due to short supply has created numerous opportunities for

Indian pork exporters.India needs to ramp up its products and export efforts to meet the

Swine meat requirements and fill the gap.

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