Pork exports to China up, values soar

Canadian pork exports to all destinations in 2011 are on par to match the level established during 2010, but demand from both China and South Korea has jumped significantly, according to an official in the industry.

“Demand for Canadian pork products from China and South Korea are spectacularly ahead of trend,” said Martin Rice, executive director of the Canadian Pork Council.

Chinese purchases of Canadian pork at the end of July in 2011 were 116 per cent ahead of what Canada shipped during all of 2010, Rice said. In 2010, Canada exported just under 50,000 tonnes of pork products to China. Value for the pork products from Canada at the end of July was 125 per cent ahead of the value seen in all of 2010.

China’s demand for pork products was partly tied to the fact that its own hog production is falling, Rice said. “The lower output is tied to the low domestic prices being seen by China’s hog producers.”

Rice projected that China will remain an aggressive buyer of pork products on the global market throughout 2011 and probably well into 2012.

The U.S. was seen providing at least half, if not more, of China’s pork import needs, Rice said, adding that demand from Canada was also seen remaining strong.

At the end of July, Canadian pork product shipments to South Korea were 113 per cent ahead of the total 2010 level, Rice said. In 2010, Canada exported just over 55,000 tonnes of pork products to South Korea.

The value of the products shipped to South Korea at the end of July was also 150 per cent better than in 2010.

“On par”

Total Canadian pork product exports as of July 2011 were 640,000 tonnes, Rice said.

“That was 58 per cent of the year-ago level, which really means that Canadian pork shipments are on par to match the 2010 total,” Rice said. Total Canadian pork product exports in 2010 totalled 1.098 million tonnes.

In terms of value for the products exported, there should be an increase from the 2010 level, he added.

“The world price for pork is quite a bit higher, which helped to offset the effect of a strong Canadian dollar,” he said.

Canadian pork product exports to the U.S. at the end of July were only 27 per cent of the 2010 level, Rice said. In terms of quantity, that translated into only 176,000 tonnes of Canadian pork being shipped to the U.S. by the end of July 2011. In 2010, total shipments to the U.S. from Canada were 336,000 tonnes.

Efforts to diversify away from the U.S. being the main destination for Canadian pork products are continuing, Rice said, but in the meantime, the country will remain an integral part of Canada’s export program.

“An interesting trend that has developed in Canada is that in order to maintain our export program share, less and less product is being moved into the domestic sector,” Rice said, noting that U.S. pork products have in turn been filling that void.

Canada’s hog slaughter capacity, based on data at the end of July, was about 490,000 hogs a week, he estimated. In comparison to capacity at the same time a year ago, that was roughly two per cent higher. Hog slaughter capacity in Canada at the end of July in 2012 is projected to be only fractionally higher, with a new facility scheduled to come on line in Ontario.

Hog production in Canada was seen as being lower and was unlikely to increase anytime soon, Rice said.

“The losses incurred by Canada’s hog producers during the bad times will prevent any expansion in output at least over the next four years,” he said.