China imposes import ban on live US hogs
China, the world's largest pork consumer, has imposed a temporary restriction on hog imports from the US to prevent a deadly virus from spreading, which makes it worse for US swine exporters who are already at a price disadvantage, Reuters reported over the weekend. No more import permits will be issued until the two countries reach an agreement on a protocol for testing animals for the Porcine Epidemic Diarrhea virus or PEDv, Reuters reported Friday, citing Tony Clayton, president of the Livestock Exporters Association of the USA. China's Ministry of Agriculture was not available for comment Monday because it was the last day of the Tomb-Sweeping holidays. China reportedly purchased about $20 million worth of US breeding hogs in 2013. Japan also officially notified the US about its import restriction last week. Mexico limited imports of live hogs from the US last year. China, Japan and Mexico are among the top buyers of US pork. Even without the import restrictions, it is difficult for US pigs to enter the -Chinese mainland market because of price disadvantages, industry analysts told the Global Times on Monday.
The PEDv, fatal in suckling pigs, has led to estimated 4-5 million pig deaths since it was first reported in May 2013, reducing hog supplies and sending -prices to record highs in the US. US hogs had long been cheaper than domestic ones until February this year, as the price of US swine hit a record RMB 18,000 ($2,927) per ton in late March before easing a little to RMB 16,000 to RMB 17,000 on Wednesday which is still at least 45 percent more expensive than domestic hogs, Ma Wenfeng, an analyst at Beijing Orient Agribusiness -Consultant Ltd, wrote in a research note e-mailed to the Global Times on Monday. "The import restriction is to prevent the deadly virus spreading to China's pig farms, meanwhile China's import ban on US hogs is helpful to ease the already tight supply of pork in the US," Ma said.
The falling prices of domestic hogs have been hurting Chinese pig farmers. A hog that sold for RMB 14 per kilogram in 2013 is now only priced at RMB 10 per kilogram, and breeding a pig leads to a loss of RMB 200, Li Cheng-wen, a Jilin-based pig farmer, told the Global Times on Monday. The retail market for pork is also sluggish. China's pork price has been falling since early this year due to oversupply, Guo Huiyong, an independent analyst of animal husbandry industry, told the Global Times on Monday.
Pork demand is weak amid the -cooling economy and partly due to the government's curb on lavishbanquets in its fight against corruption, Guo noted. Restaurant consumption accounts for about 40 percent of all pork consumption, he said. China's central government made the latest purchase of 65,000 tons of frozen pork for the State reserve on March 27, amid an effort to stabilize the pork price and protect the interest of pig farmers. The US is not only China's largest live swine supplier but also the largest pork exporter, according to a research report released in February by the US Department of Agriculture (USDA). However, the US share of China's imports fell to 21 percent in 2013 from 54 percent in 2011, according to USDA.