China suspends pork imports from Italy: The landscape and potential impacts

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Supply chain disruptions caused by viruses are not limited to the coronavirus in 2022. On January 26, 2022, the Chinese Ministry of Agriculture announced a suspension of pork meat from Italy after the detection of African swine fever virus in a wild boar in this country. Mainland China’s moratorium is the latest in a series of challenges to global Italian pork markets, with Japan, Taiwan, Kuwait and Switzerland also denying Italian pork imports with similar restrictions, analysts say. IHS Markit Agriculture. The suspension of imports from mainland China will likely have a significant impact on pork exporters in Italy and potentially create additional opportunities for other suppliers in the mainland China market.

The African swine fever virus causes hemorrhagic fever in domestic pigs and in 2019 infected around half of the herds in mainland China. This crisis has prompted mainland China to look beyond its borders to meet its pork needs, with imports rising from 1.2 million tonnes in 2018 to 4.3 million tonnes in 2020.

Mainland China Imports by Tonnage

IHS Markit Global Trade Analytics Suite

As herds in mainland China have started to recover from the 2019 outbreak, the return to domestic supplies is evident as import volumes have started to decline. But in the case of Italy, the suspension of imports by mainland China can have dramatic consequences.

Imports from mainland China, HS 0203 from Italy by tonnage

IHS Markit Global Trade Analytics Suite (GTAS)

As a supplier to the mainland Chinese pork market, Italy was not a player until entering the market in January 2020. As local supplies began to become more available, imports from Italy in mainland China have declined in recent months, but were still sufficient to make Italy the 13th largest import market, accounting for about 0.71% of the total mainland China market share.

HS 0203 Italian exports for main markets by tonnage

IHS Markit Global Trade Analytics Suite (GTAS)

From an Italian export perspective, the recent import suspension could have a massive impact on its pork industry. Since 2018, mainland China has grown from the 60th biggest export market for Italian pork, now accounting for 22.5% of the total export market share.

Italian exports of HS 0203 by tonnage

IHS Markit Global Trade Analytics Suite (GTAS)

While fluctuating demand from mainland China has altered much of the market landscape for Italian pork exporters, the change in overall exports has not been as significant. Italian pork destined for Japan has grown from around nearly 13,000 metric tons in 2018 to just over 6,500 metric tons in 2020, with mainland China taking much of that margin.

Mainland China’s suspension of Italian pork imports is likely to be a minor opportunity for suppliers from other countries, although the overall mainland Chinese import market is shrinking as consumers return to domestically produced goods. . Meanwhile, a challenge awaits pork exporters in Italy as they seek new markets to compensate for the loss of mainland China as a viable market.

The IHS Markit Global Trade Analytics Suite (GTAS) allows clients to explore two-way commodity trading in any type of commodity to see where new markets are emerging. For Italian pork producers, new markets of interest could include Mexico, the Philippines and Chile, as all saw a significant increase in imports in the first three quarters of 2021.

Major Importers of HS 0203

IHS Markit Global Trade Analytics Suite (GTAS)

The GTAS also allows users to leverage available 13-country bills of lading to view companies involved in imports of particular products, giving them insight into market players. Below is an overview of the companies that imported HS 0203 (pork meat) into the Mexican market in the last 15 months, based on data from the Mexican Bill of Lading.

Importers of HS 0203 in the Mexican market

IHS Markit Global Trade Analytics Suite (GTAS)

Italian pork producers are facing near-term challenges with the new mainland China suspension order and a declining market across mainland China, but tools exist to help them and others looking to expand or adjust their business strategies in the future.

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Editor’s note: The summary bullet points for this article were chosen by the Seeking Alpha editors.

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