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June 21, 2019

Rabobank: African Swine Fever affects China’s pork consumption

China’s pork consumption has dropped by 10% to 15%, year-to-date, by our estimates, driven by food safety concerns. The level of consumption change varies greatly between the different distribution channels. Looking forward, and reflecting on the current situation and trends, it is quite possible we have seen the ‘peak’ of pork consumption.
Food processing, particularly branded consumer foods, may have already shifted to imported pork or other animal proteins such as poultry, as product ingredients. Among foodservice sub-categories, group dining, such as canteens at schools or factories, and on-site catering for large companies, is also believed to have shifted from pork to poultry and other animal proteins. Chicken breast meat, which is heavily used in meat processing and foodservice, has seen large price increases this year, and is up by 44% YOY in May (see Figure 2). In contrast, the prices of beef, sheep meat, and chicken meat in food retail markets have increased more modestly, and are up by 6%, 11%, and 8% YOY in May. This implies that pork substitution is mainly occurring in B2B channels, and largely based on the perception of consumers’ food safety concerns.  Read more

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