Charcuterie News, November 2020
Global pork demand has had a positive rebound following the impacts of COVID-19. It is important to remain optimistic as to how many Asian markets will be affected. While China restores its domestic hog production and weans itself off the global market, exporters will face a new challenge of finding new markets for these volumes.
In this Pig Progress article, Christine McCracken from Rabobank states, “Since its initial ASF outbreak in 2018, China has moved aggressively to re-establish local supplies, and it’s already seeing a rebound in domestic availability. Chinese pork production is expected to normalise by 2024, which will leave a global supply overhang.”
How does this impact the Australian domestic market?
Domestically, the Australian smallgoods manufacturers are reliant on imported processed pork products which accounts for approximately 70% of ham and bacon products consumed in Australia. The Australian smallgoods industry is not immune to the current demand of pork and has found increasing supply issues domestically due to the increased competition of pork globally. Impacting this further, domestic pork’s limitations in meeting Australian smallgoods manufacturers’ requirements is a factor in the global competitiveness in supplying the sector. The rising cost of domestic production and the scale of production required, limits the domestic markets’ ability to effectively supply domestic smallgoods manufacturers.
While the Australian smallgoods manufacturing industry prefers to use domestic pork, it is not feasible to rely on 100% of domestic supply to meet demand. This year we have seen shortages of local product. The Australian smallgoods industry needs improved transparency around domestic production volumes to be less reliant on imports and can then forward purchase and plan around a cost effective and reliable domestic supply chain. Domestic pork supply can be impacted as well by seasonal variability of the supply of feed, and with droughts, the extreme price fluctuations.
While these issues continue within the domestic pork supply chain, the Australian smallgoods industry will continue to rely on imported pork, and will look to access new markets and strengthen import partner relationships.