Brazil will in fact have more competition in exports in 2020, but it must continue to sell good volumes to the Chinese, increasing the numbers compared to 2019, given the complicated picture of the Chinese market, supply deficit and inflated prices. The following are some external factors that must influence Brazil’s pork shipments over the year:
– The signing of the ‘phase one’ of the trade agreement between the US and China is scheduled for January 15, which must lead the Chinese to buy significant volumes of US agricultural products, including pork. It is worth noting that US exports to the Asian country reached a record volume in 2019 and are expected to advance further this year. US pork and beef production are also at record levels, showing the country is prepared to meet an increase in Chinese demand in 2020. According to a USDA’s report in late December, the pork herd on December 1 last year was at 77.338 million head, up 3.73% from the same period a year earlier, when it was at 74.556 million head.
– The European Union has exported large volumes to China. According to EuroStat, between January and October 2019, 1.786 million tons were exported to the Chinese, up 60.3% from the same period of 2018 (1.114 million tons). The point that deserves close attention throughout the year is the development of ASF in the bloc, which has so far reached mainly Eastern Europe. However, there is great concern amid local authorities, as numerous outbreaks have been reported on wild boars near the border with Germany, one of the region’s main exporters. Should the disease advance and cause great damage in Europe, it would pave the way for larger exports from the US, Brazil and Canada.
– Canada must resume good export volumes to China in 2020 after the end of a 4-month embargo on pork caused by the presence of ractopamine in a lot shipped to the Asian country in the first half of 2019. It is worth recalling that before the embargo Canadians were one of China’s leading suppliers of pork.