By: Marika De Vincenzi, Elisa Donegatti, Mirco De Vincenzi, Ester Venturelli
The slowdown of the Chinese economy has reached such a level that it has prompted the Chinese Central Bank to decide to lower interest rates with the aim of stimulating economic recovery. This slowdown is reflected both in imports (overall slowing down compared to previous years) and in domestic consumption.
PORK MEAT. Let’s take the pork sector: weak demand and excess supply have led to a drop in imported quantities, which in the first half of 2024 are more than a quarter lower (-27%) compared to the first half of 2023. In value terms, the decline has been even more significant: -40.8%, which has brought imports down to just over 2.2 billion dollars.
A market marked by sluggish consumption has led to a drop in domestic pork production, triggered by a reduction in the number of sows. This scenario stimulated a recovery in prices in June, both for pigs (+10.4%) and pork (+10.9%) compared to the previous month.
TESEO.clal.it – Pork meat – monthly price trend in China
FEED INPUT. Focusing on raw materials, the sizing of the swine in China has caused a reduction of feed demand. Consequently, Soy and Corn consumption in the country has slowed down. Soy and derivatives market is characterised by a large availability of products compared to demand due also to the substantial imported quantities (48,4 million tons in the first semester of 2024). Over the coming months, Chinese demand on international markets could weaken and absorb less product (the reduction of the import from the US is already clear for oilseeds, given the -37,9% for the first semester of 2024 compared to the same period of 2023) causing a bearish effect on prices.
Also the Corn market, currently, is characterised by supply compensating demand, and this led to a reduction of local prices over the last 12 months and an import reduction.
TESEO.clal.it – China: Soy ending stocks
DAIRY. The demand in the dairy sector is also weak. Local supply is increasing, supported by industrial investments, while farmgate prices have been downward trending for months, reaching a -22.5% difference between June 2022 and January 2024.
The overall picture shows an ongoing negative trend of import: in the first semester, Chinese dairy import decreased overall by -16% compared to the same period of 2023, with decreases mainly for Drinking Milk and Powders.
CLAL.it – China: Dairy import, monthly variation
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The CLAL.it team is composed of young people who with the help of Computer Science study the dairy market and develop tools to provide the Operators of the dairy sector with a comprehensive real-time view of the national and international market trends.
