China’s pig recovery will dent export prospects in 2022

The ongoing recovery of China’s pig industry is expected to be the largest single driver of growth in global animal protein markets in 2022, but that recovery will restrict export opportunities for UK pork producers.

According to Rabobank’s latest Global Animal Protein Outlook, pig prices are expected to remain under pressure for much of 2022, largely because pork exports from the UK and Europe are likely to decline as a result of fewer shipments to China.

Despite an expected slight decline in production levels in the UK and EU, a broader increase in supply in the global market will push overall pork prices down globally, the bank has forecast.

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Justin Sherrard, Rabobank global strategist for animal protein and report author, said: “For 2022, we expect EU27 pork exports to decline by about 10% year-on-year as China’s import demand further softens.”

UK pork exports to Europe are also expected to fall as the EU27 remains well supplied, and additional transaction costs between the EU27 and the UK will likely persist and hinder trade.

Poultry and beef outlook

Elsewhere, Rabobank anticipates the poultry market will recover from a mixed 2021.

The bank forecasts global production growth of about 2%, ranging from 1% to 5% in the major markets in 2022, with demand staying strong.

In the UK growth is likely to be 1.5%, it predicts, but only if some of the supply chain issues can be tackled by the government. Poultry exports will continue to decline as a result of an increasing focus by UK producers on domestic sales.

In the beef sector, the bank believes there will be an ongoing recovery in trade between the UK and the EU, although it cautions that increased administrative burdens are likely to continue to have an effect on the beef trade.

On a consumer level, Rabobank expects demand for beef to remain solid.