Analysis: How much pork does the UK export to China?
Just over six years ago, Xi and Cameron announced the £40bn of investment deals that marked the high point of the UK’s Golden Era with China. Trade with China has steadily increased every year since, and many of the decisions made then - from market access to investment agreements - are shaping the UK’s economy today.
In a series of analysis pieces, we’ll break down the data to look at how rising trade with China has shaped British industry.
One of the biggest success stories of the Golden Era was British pork. Ministers - most famously Liz Truss - queued up to visit Beijing to secure access to its pork markets. From 2013 to 2019, the UK secured access for exports of everything from pig trotters to frozen boar semen.
China is by far the world’s largest pork consumer; about half of the country’s total meat consumption is pork and the country has maintained emergency pork reserves since 1996. China also has strong demand for offal, which is essential in a global agricultural market with increasingly razor-thin margins. Pig trotters are almost worthless in the UK, but valued highly in China.
By 2020, China was buying 50% of British pork exports, or around 200,000 tonnes of pork. The growth was borderline exponential, driving almost all of the industry’s overall growth.
But this autumn has seen the British pork industry plunged into crisis. British pork producers have sounded the alarm, warning about having to cull healthy pigs. While this was largely driven by labour shortages in abattoirs, a worsening export environment has also played a role. Exports to the EU were initially dampened by customs problems and exports to China have fallen off a cliff, with exports of pig meat falling 35% year-on-year to August 2021.
The most visible sign of trouble was when Beijing banned pork imports in the immediate aftermath of the Covid-19 pandemic, based on the conviction that Covid could spread through frozen food. British farmers have complained about slow reopening of access, even after proving that their pork plants were Covid-free. They’re not alone: Germany was hit with a ban on exporting pork to China last September, nominally over the discovery of ASF in wild boars. Berlin is still in negotiations with Beijing over ending the ban.
But the core structural reason is that China’s domestic pork industry has now recovered from the devastating African Swine Fever (ASF) crisis of 2018, which one expert called the worst animal epidemic in history. Around 50% of China’s pigs were wiped out. China turned to the rest of the world, and doubled its imports of pork in 2019 and 2020.
China had originally slapped 25 percent tariffs on US pork at the height of the 2018 US-China trade war. But when the pork shortage hit and China started using its emergency pork reserves, both sides relented. In August 2019, Chinese companies bought over 10,000 tonnes of US pork - even after Beijing suspended all other purchases of American agricultural products.
But now - three years later - China is facing a huge oversupply of pork. The price of pork in China has dropped by around 60% compared to this time last year. Investment soared as pork producers looked to rebuild Chinese pig stocks and China’s State Council called for China to aim for 95% domestic self-reliance in pork production. President Xi Jinping’s push for greater agricultural self-sufficiency is now reaping rewards.
While the oversupply will likely correct by mid-next year, exports are likely to settle at pre-ASF rate. The industry has restructured in favour of large industry producers over small rural farmers. And Chinese analysts also reckon demand has permanently dropped as Chinese consumers switched to alternative proteins during the ASF crisis.
British pork industry is now likely to shift towards finding ways to support the new technology-driven pork industry in China, which has consolidated towards huge pork farms. Chinese behemoth Muyuan Foods made headlines in December last year when it was announced it was building the world’s largest pig farm, which would be capable of holding 84,000 sows at a density five times higher than regular farms.
This trend of high-density pork production also raises a new set of concerns about the risks of intensive agriculture. Xiaowei Wang’s brilliant book Blockchain Chicken Farm takes you behind the scenes of Chinese pork factories today; a world where Chinese internet farm NetEase runs a side gig in optimising pork production and Alibaba has developed an AI ‘agricultural brain’ which monitors pigs in real time, looking for signs of disease.
In many ways, the story of the UK pork industry’s relationship with China tells the story of the past few years; huge short-term economic upside tempered by Xi’s desire for domestic self-reliance, the risks of unsustainable agriculture and a clash of trade and geopolitics.
Future prospects
Import demand from China has peaked in the short term. Moving forward, China is likely to continue importing one to two million tonnes of pork a year, which will be enough to sustain some demand for British pork. But, bar another pig epidemic, the days of exponential growth in imports are likely to be over.
New markets are growing fast, but from a low base. Imports to the Philippines are up 844% in 2021 so far; to Australia 296% and 514% to South Africa.