Rabobank anticipates weaker global pork trade

While sluggish economic growth has been impacting consumers around the globe, pork continues to hold a relatively stable position on consumers’ plates, notes Rabobank’s report.

Chenjun Pan, senior analyst Animal Protein at Rabobank, explains that performance varies from region to region. “In Europe, pork consumption remains under pressure due to ongoing high prices. In the US, demand was slightly below expectations to start the summer, as uncooperative weather and poor air quality challenged the start of the grilling season. And in China, pork consumption remains weak due to the underperforming economy and heat waves across the country.”

While pork trade was relatively strong in the first half of 2023, driven primarily by an increase in imports in China, Pan expects that, for the second half of 2023, global trade will weaken. “Inventories of frozen pork are high in China due to weak consumption, pressuring imports. Also, tighter supply in the EU restricts shipments out of the region,” said Pan.

The Rabobank report highlights that pork supply in the EU and UK declined in the first 4 months of 2023, with some countries seeing falls at double-digit rates. This tight supply supports high prices, which, in turn, pressured consumption.

Meanwhile, in China, pork supply continues to exceed demand, pressuring prices and causing multiple-month losses for producers. Rabobank adds that liquidation of the sow herd in the country will continue in the second half of the year.

The US is also seeing plentiful supply, where producers have relatively healthy balance sheets after 2 years of outsized profits. Given projected losses, however, Rababank expects US herd liquidation to ramp up into 2024.