U.S. pork exports show good prospects for growth in Hong Kong’s domestic market, greatly benefiting from the Hong Kong dollar’s peg to the U.S. dollar (US$1= HK$7.80). Products from other major competitors have become more expensive as a result of their currency appreciating against the U.S., and thus, Hong Kong dollar. U.S. pork products continue to sell favorably in high-end markets. The use of Chinese cuts has helped increase sales for U.S. pork products used in Chinese restaurants. Nevertheless, competition remains tough in an open market like Hong Kong. Chilled pork products face increasing competition from premium pork products supplied by Spain and Japan.
Despite the favorable domestic market, Hong Kong’s 2011 imports of U.S. pork and offals are expected to drop to $190 million, a 32 percent decline from $278 million in 2010. The decline is due to the continued expected decrease in U.S. pork exports transshipping through Hong Kong.
Hong Kong’s trade is very volatile due to the re-export trade. In the first half of 2011, Hong Kong imported $27 million in U.S. pork products and $67 million in offals. During the same time period, Hong Kong’s pork and offal re-exports amounted to 28 percent and 75 percent of total imports, respectively. The high export percentage, particularly for offals, highlights the fact that Hong Kong remains a key re-export center for the Chinese market.
China and Brazil are the two leading pork suppliers to Hong Kong. Currently, Hong Kong importers are very reluctant to source Chinese pork because it is considered too expensive. Brazilian products are relatively more popular in terms of prices and supply. Recently, importers said they were given very competitive offers when Russia imposed a ban on pork imports from certain Brazilian plants.
Hong Kong is experiencing inflationary pressure. From July 2010 to July of this year, the average retail price for pork rose nearly 26 percent. In a bid to combat inflation, price conscience consumers are replacing freshly slaughtered pork with Chinese chilled or even frozen pork.
FAS-USDA/ United States.