A better cost environment and resilient demand are supporting the outlook for global pork markets, according to the new quarterly pork report from RaboResearch, but risks remain. Lower feed costs will support farming expansion, and pork consumption in the second half of 2024 should improve due to seasonal demand. However, disease pressures and trade vulnerabilities – including China’s antidumping probe into EU pork imports – remain risk factors.
Global trade is facing challenges from geopolitical dynamics
In June, China launched an antidumping probe into EU pork imports. The outcome of the investigation could impact the EU market and have a ripple effect across the global market.
“A suspension of EU exports or high tariffs could mean global pork trade flows are rerouted as China finds new origins and EU exports flow to other regions,” said Chenjun Pan, senior analyst – animal protein at RaboResearch. “If EU exporters offer discounts to capture new markets, importing countries may need to support and protect local producers. Meanwhile, other exporting countries may find their traditional trade partners shift to cheaper EU pork products.”
Furthermore, the U.S.-China trade war that started in 2018 has already altered global pork trade. The U.S. lost competitiveness with China due to its higher tariffs, with Brazil as the largest beneficiary. The upcoming U.S. presidential election could bring changes in U.S. trade policy and uncertainty to global trade patterns over the coming years.
“With rising concerns over trade disruptions given these geopolitical complexities, many governments have supported improvements in domestic production to increase self-sufficiency and reduce reliance on imports,” Pan said.
Lower feed costs will support farming expansion
Ample global supplies of grains and oilseeds should pressure feed prices in the second half of the year. This will continue to benefit producers and encourage herd expansion.
“Earlier supply contraction and lower feed costs in most regions have improved farming profitability, along with productivity gains,” Pan said. “Producers in some regions have started to rebuild sow herds, anticipating declining feed prices and growing demand.”
Supply-demand balance will vary in different regions this year
Some countries, such as China, Vietnam and Philippines, will see tight pork supply in the second half of 2024 due to disease outbreaks. Other regions, including the EU and the U.S., will likely see pork supply increase slightly.
“Sow herd recovery will likely be faster than expected, especially in the EU and China,” Pan said. “Productivity gains will continue despite recurrent disease issues in some regions.”
Pork demand is resilient
Consumer demand for pork is relatively resilient across the globe, driven by a mixture of factors, including easing inflationary pressure, slower economic growth, competitively priced proteins and seasonal changes. Pork consumption should improve due to seasonal demand over the remainder of the year. In addition, easing pork prices in the EU and weak prices in the U.S. should support consumption in these regions.
