parallel to the fall of feed costs after the hikes of 2007-08 and due to the strong drop in
The profitability of the sector remained very low and producers all over the world continued to register losses, particularly in the US, Canada and the EU, in spite of the drop of feed costs. Against this background, situation in China (holding roughly half of world production and consumption) substantially impacted the sector in 2009 as its domestic pig sector almost completely recovered from a swine disease problem with pork production and consumption returning to pre-crisis levels and import falling dramatically from 2008 levels. In the short term world pigmeat prices increase substantially in response to renewed demand after the recession, FAPRI and OECD-FAO forecast. However, as production, in particular from Brazil and China, both of which are experiencing high productivity gains, expands prices are expected to ease off already from 2013 (FAPRI) or 2015 (OECD-FAO). USDA price forecast develops along similar although less volatile pattern, however a substantial difference in price projection for the base year of 2009 exists between the USDA and the other Outlooks.
OECD-FAO projections for world pigmeat production and consumption are relatively
more bullish (1.9% per annum) compared to FAPRI and USDA (both 1.3%). This growth
is expected to originate predominantly in developing countries, which will account for a
great majority of additional output.
Recovering from a 12% drop in 2009, pork world trade grows by 27% by 2019
compared to 2007-09 base in the most bullish, FAPRI forecast. OECD-FAO and USDA
projections are more moderate (with a 21% and 12% increase respectively).
Among the world’s top net pork exporters, all the Outlooks forecast an increasing market
share for the US and Brazil, while the projections for Canada and the EU are bearish. The EU is forecast to lose between 8 (USDA) and 15 (OECD-FAO) percentage points of its global market share. OECD-FAO bearish projections relate to their expectations of the EU pork net exports decreasing as following policy reforms domestic output falls and consumption grows in the EU. FAPRI and USDA forecasts point rather to lower competitiveness of the EU exports as the reason behind losing the export share. On the imports side, the expected trend is contrary to the exports side as the current major net importers (Russia and Japan) are expected in all the Outlooks to see their market shares decreasing. Russia’s net imports of pork decline throughout the outlook as domestic production grows stimulated by the country’s policies to achieve higher self sufficiency.
As China recovered from the swine disease problem and related dramatic increase in pork imports in 2008, the country saw its domestic pork production resuming growth and became a small net exporter once again in 2009. The Outlooks differ on the prospects for Chinese net trade in the coming decade with USDA expecting expanding production to offset rising pork consumption and the country to remain a small net exporter, and FAPRI and OECD-FAO projecting that China will become a growing net importer again. The other main net importing countries, South Korea and Mexico are projected to increase their imports with FAPRI forecast strongly bullish in this regard. However, OECD-FAO forecast are less bullish for the two countries with South Korea net imports share keeping firm level throughout the outlook period and Mexico’s losing its world share as domestic consumption increases stronger than production.