China's import demand for pork surged in the wake of supply deficits caused by African swine fever, and in 2020 imports nearly quadrupled. Hog sectors around the world expanded production, shifted product out of their domestic markets, and redirected pork from other destinations. In 2021 as China recovered, imports were 20% lower than the record levels of the prior year. Major exporters sought alternative markets – though most, with the notable exception of Brazil, were unable to reallocate such large supplies and trade declined.
In 2022, China's pork imports are forecast to decline nearly 20% and push global trade lower, more than offsetting a recovery in demand among other major importing countries as they recover from COVID-related disruptions. As growth in other markets will again not offset the decline in China, most major pork exporters will experience a second consecutive year of contracting shipments.
The European Union (EU), the top pork supplier to China and the world’s largest exporter, is forecast to see exports decline 5% to just under 4.8 million tons this year. Exporters in the EU are expected to find some relief from lower China demand in the form of stronger demand in the United Kingdom, where imports are projected 7% higher in 2022. The EU will also boost shipments to Japan, South Korea, and Australia, countries to which EU exports declined in recent years as sales shifted to China. Competitive EU carcass prices compared to U.S. and firm demand will propel higher shipments to these markets in 2022.
U.S. pork exports are forecast 6% lower year-over-year. China's demand for U.S. product was among the first to come under pressure, with U.S. shipments to this important market falling during every month of 2021 compared to the previous year due to high U.S. prices and retaliatory tariffs. These factors are expected to persist in 2022 causing further declines in U.S. market share. Partially offsetting losses in China, demand for U.S. pork is expected to grow in Mexico. Going forward, Colombia and the Dominican Republic are expected to grow further, although more slowly than last year as high U.S. prices create headwinds.
Canada's exports are expected to decline modestly in 2022, sliding 1% year over year. Like the United States, Canada faces headwinds in China. Currently, the majority of Canadian pork production remains suspended from China due to reported COVID cases at several plants; however, most cases occurred months ago and do not necessarily represent active outbreaks. Tight supplies in the United States – Canada’s top export market– will help offset declines to China.
Of the four largest exporters, only Brazil saw overall shipments grow in 2021 on strong production gains, competitive prices, and a weak real. Even exports to China increased year over year as Brazil boosted its share in that market to 16%. In 2022, Brazil is expected to sustain aggregate exports, seeing modest growth of less than 1%. In China, Brazil will likely capture a larger portion of a shrinking pie due to more competitive pricing than other major exporters. Meanwhile, Brazil continues to perform well in Vietnam and the Philippines and demand is growing in neighboring Argentina and Uruguay.
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