Potential China action against EU pork may be double-edged sword for Brazil
Chinese demand for the meat could shift towards Brazilian exporters amid potential anti-dumping measures
CHINA’S potential imposition of anti-dumping measures on European Union pork imports, a disastrous scenario for the bloc, could benefit Brazil’s exporters but also affect the country’s ability to compete elsewhere, analysts and industry sources said.
State-backed Chinese media reported that Chinese companies have asked for an anti-dumping probe into pork imports from the EU.
The potential for additional demand from China as a consequence of any anti-dumping measures is welcome for Brazilian exporters. Brazil is one of the top three sellers of pork to China, along with the US and EU.
However, Rabobank analyst Wagner Yanaguizawa has noted that Brazil could face more competition in the Philippines, Japan, South Korea and the United Kingdom, which are markets Europe could try to access if it loses China.
The Philippines became Brazil’s second-largest pork meat export market this year after China, with sales rising 85 per cent by volume between January and May by volume, Brazilian trade data showed.
“These countries would most likely shift part of their demand to the EU, because there would be an excess of meat,” Yanaguizawa added, stressing the bloc’s logistical advantages over Brazil.
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The Brazilian Association of Animal Protein (ABPA) said market dynamics dictate that a competitor will fill in the gap if one exporter stops serving a market.
According to the ABPA, Brazilian pork processors operate at 85 to 90 per cent of capacity, which signals room to boost supplies to some extent.
An industry source said Chinese restrictions on EU pork could be a double-edged sword, as it could result in European suppliers turning “aggressively” to markets currently served by Brazil.
He also noted another potential scenario in which China would reduce pork imports, leading to global oversupply.
“I believe China will demand less than two million tonnes per year,” the source said, adding that China’s domestic production has recovered from the impact of African swine fever.
China’s pork imports slumped to 2.6 million tonnes last year from 5.6 million tonnes in 2020, according to the country’s industry data.
Beijing’s investigation into EU pork appears mainly aimed at Spain, the Netherlands and Denmark.
“If irregularities are found, European sales to the world’s largest pork import market will be forced to look for other major destinations,” consultancy Datagro said.
Brazil stands to gain from good trade relations with China, but its own sales to other markets may lag, Datagro said, citing the Philippines as an example, which currently accounts for 13 per cent of Brazil’s exports. REUTERS
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