China is the largest pork consumer in the world. International pork producers providing better pork at lower cost aim at China’s pork market, for there are a large number of pork consumers and domestic pork prices have no advantage. Import volume of pork soared since 2016. According to statistics from China Customs, total import volume of pork reached 1,620,000 tons and increased by 108% YOY in 2016, hitting a record high.
Annual pork consumption is above 50 million tons in China. Demand for hogs varies as season changes. Generally speaking, meat consumption surges in cold autumns and winters while becomes weak in hot summers. What’s more, important festivals and holidays such as the Mid-autumn festival and the National Day stimulate pork consumption greatly. In addition, the traditions of making preserved meat in Southern China and slaughtering pigs to celebrate the Spring Festival greatly drive pork consumption.
Annual Output Volume of Pork in China (10 Thousand Tons)
Profit of hog slaughter business is low. In 2015, average sales profit margin of national designated slaughter enterprises was only 4.72%. Purchasing prices of hog accounted for 60% of production cost of slaughter enterprises.
Annual Slaughter Volume of Major Hog Slaughter and Processing Enterprises in China
|Enterprises||Slaughter Volume (10 Thousand Heads)|
|New Hope Group||850|
|Chuying Agro-Pastoral Group||550|
Source: Public Data
As the output volume of pork fails to meet the domestic demand in China, the import volume continues to rise.