On October 12, USDA updated its projections for the global meat sector for 2022 and 2023. The data from China remain the highlight, as it is the world’s largest pork producer, consumer and importer. As previously described, the Chinese pig chain operates with positive margins, and this favors investment and production. Chinese production must reach 52 mln tons in 2023, an increase of 1.96% compared to 51 mln tons in 2022. Consumption will grow less than production, and with that imports will continue to shrink in 2023. Chinese domestic consumption must reach 53.58 mln tons next year, against 52.69 mln tons estimated in 2022. The data suggest that the Chinese market is reaching a balance point, be it in terms of supply/demand or prices.
European Union
The bloc’s pork production was forecast at 22.580 mln tons in 2023, down 0.4% from 22.3670 mln tons this year. Second consecutive year of falling production. The high cost of nutrition, energy, and environmental restrictions weigh on the decision of breeders. The prolonged drought and the Russia-Ukraine conflict end up affecting key production inputs. The European Union will continue as the world’s largest pork exporter, but it is slowing down. For 2022, exports were estimated at 3.9 mln tons, down 21.8% from last year’s 4.987 mln tons. For 2023, a 3.59% decline is expected, reaching 3.76 mln tons.
United States
US production must reach 12.321 mln tons this year according to the USDA report, down 1.9% from 12.560 mln tons in 2021. For 2023, the Department estimated production at 12.410 mln tons, an increase of 0.72%. For exports, USDA remains pessimistic, which can be explained by the lower need for purchases by China, strong prices in the USA, and the high dollar. US exports in 2022 were estimated at 2.898 mln tons, down 9.07% from 2021, when they reached 3.187 mln tons. For 2023, the estimate is 2.849 mln tons, down 1.69%.
The Philippines
The country played an important role in this year’s Brazilian export figures and therefore deserves special attention. According to data compiled by SAFRAS and Mercado, between January and September 2022, the Philippines imported 68.1 thousand tons of pork from Brazil, ranking third in total imports, only behind China and Hong Kong. In the same period last year, the Philippines imported 19.926 thousand tons. The Philippines as well as China were severely impacted by PSA. Production fell from 1.585 mln tons in 2019 to 950 thousand tons in 2022, according to USDA. As a result, there was an increase in imports in the period, which benefited Brazil this year. However, USDA predicts a slight recovery for Philippine production in 2023, expected to reach 1 mln tons. According to USDA, imports from the country must close at 550 thousand tons in 2022, against 461 thousand tons last year. For 2023, imports must fall 18.18% at 450 thousand tons.
Brazilian pork prices tend to remain attractive on the global stage in 2023, compared to the USA and European Union, which can help export good volumes to Asia. Brazil must be aware that the scenario for exports will be even more challenging next year, and this required balanced production in the domestic market so that margins can find healthy and sustainable levels.