Hong Kong. Livestock and Products Annual. Jul 2013 Ноя. 4, 2013
Hong Kong’s imports for pork are projected to reach 368,000 MT in 2014, with a modest rise of 2 percent from 2013. Buoyant inbound tourism and economy help boost trade. Production is expected to remain stable at around 138,000 MT. Pigs supplied locally and from China accounted for about 94 and 6 percent respectively. Supply of live pigs from China is forecast to be sufficient, as evidenced by the fact that pork prices in China have been decreasing. However, there is no likelihood that local farms will increase production significantly given the expensive land and labor cost in Hong Kong. Hong Kong is a mature market without remarkable fluctuations in demand when the re-export trade factor is excluded.
Hong Kong’s 2014 pork market is forecast to be comparable to 2013 following some disruptions in 2011 and 2012 caused by high pork prices in China. China has an influencing role on Hong Kong’s pork market as it is the largest supplier of muscle cuts and the sole foreign supplier of live pigs. Hong Kong’s 2013 pork market in the areas of production, consumption and trade has been much affected by the increased pork supply and lower prices in China. As a result of production cycle after a very tight supply in 2011 and early 2012, pig production in China in 2013 has increased as evidenced by the lowering consumer price of pork (-4.6% YOY in January – May 2013).
On the production front, Hong Kong’s slaughtered number of pigs in 2014 is expected to reach over 1.7 million head with a daily average of about 4,700 head. The production level will probably remain stable following an estimated 5 percent rise in 2013, which is made possible by the sufficient supply of live pigs to Hong Kong from China. China supplies about 94 percent of live pigs to Hong Kong with the remaining 6 percent supplied locally.
Pork consumption in 2014 is projected to rise very modestly by one percent. Hong Kong consumers still have a strong preference for freshly slaughtered pork while the majority of catering industry is using chilled/frozen pork. However, given the more economical prices and convenience of chilled/frozen pork, household consumers have been buying increasingly more chilled/frozen pork at the expense of chilled/frozen pork.
In the area of trade, Hong Kong’s pork imports are projected to reach 368,000 MT in 2014, with a modest rise of 2 percent from 2013. Buoyant inbound tourism and economy help boost trade. When the re-export factor is excluded, Hong Kong’s pork market is very stable with no major disruptions.
Local pig production is very stable. There are about 43 pig farms in Hong Kong, accounting for only 6 percent of total supply in terms of volume and 7.3 percent in terms of value. While there is no likelihood to expand given the expensive land and operation costs in Hong Kong, pigs raised locally still have a niche market. Consumers have a general impression that pigs raised locally are subject to better control of veterinary drugs and hormones. However, the Hong Kong food safety authority assures that live pigs from China are supplied by registered farms acknowledged by the Hong Kong government and all food animals are subject to stringent surveillance program over chemical and veterinary drug residues. Given consumers’ preference over locally slaughtered pork, retailers usually will specify in their stalls the origin of the pork and ask for higher retail prices if it comes from pigs raised locally.
The Hong Kong food safety authority monitors chemical and veterinary drug residues in food animals by collecting and testing samples from every consignment entering the slaughterhouses. There are 44 drugs under monitoring1. About 52,000 pig urine samples were collected in 2012 and there was only 1 positive case of the detection of prohibited chemicals.
Pork consumption is projected to rise very modestly by 1 percent reaching 506,000 MT in 2014. Hong Kong is a mature market. Population stands at 7.17 million at the end of 2012, with a growth rate of 0.9 percent. Inbound tourism is strong boosting the catering industry. Hong Kong hosted a total of 49 million visitors in 2012, representing a rise of 16 percent over 2011.
Hong Kong consumers still have a strong preference for freshly slaughtered pork while the majority of catering industry is using chilled/frozen pork. In 2012 and 2013, there have been some favorable factors stimulating the consumption of fresh pork and some of them may still have an impact in 2014.
First, the substitution effect has clearly been at play. Pork prices had a modest rise compared to other meat products. In 2012, pork prices on average rose about 2 percent with sharp contrast to the tremendous increase of 20 percent in beef prices. Moreover, consumers hardly replace fresh beef with chicken because the supply of live chicken has been administrated by the government in an attempt to control the risk of avian influenza.
Another reason propelling increased consumption of fresh pork is that consumers’ purchasing behavior has been shaped by past price increases. The average pork price had risen over 18 percent between 2012 and 2011 compared to the modest price increase this year of 2 percent. Thus, consumers now have the perception that the once increasingly expensive meat has stabilized in price and they have an incentive to purchase more.
Thirdly, the consumption of live chicken in Hong Kong was adversely affected in April due to the detection of H7N9 human cases in China. Some consumers opted to take a precautionary attitude of not buying any fresh chicken and with expensive beef prices, some consumers sought to replace fresh chicken with pork. But this substitution effect was very transient and gradually abated in June when China seemed to have control of the avian influenza cases.
The consumption of fresh pork is forecast to increase further in 2014 if prices for fresh beef continue to escalate and those for fresh pork has been kept stable. The price of beef in the first three months of 2013 has already risen over 34 percent.
Pork ranks as the most popular meat item for Hong Kong consumers. They are not only used for dishes but are also a key component for most soup recipes. Chicken ranked second, but retail outlets and import levels are strictly regulated by the government due to concerns of avian influenza risk and thus supply is difficult to increase substantially.
It is worth noting that the consumption share of freshly slaughtered pork, chicken and beef relative to chilled/frozen product is 29, 5 and 4 percent respectively. These figures showed that consumers (particularly for household purchases) still have a strong preference for fresh meats when there is no regulatory control such as there is for poultry. However, given the more economical prices and convenience of chilled/frozen pork, household consumers have been buying increasingly more chilled/frozen pork at the expense of chilled/frozen pork in the long term trend.
Hong Kong’s pork imports are forecast at 368,000 MT in 2014, up 2 percent from the estimated level of 360,000 MT in 2013. Buoyant inbound tourism and economy help boost trade. However when the re-export factor is included, Hong Kong’s total imports will fluctuate significantly.
Hong Kong experienced a 40-day long dockers strike starting late March asking for better pay and working conditions. Part of Hong Kong’s port operation was interrupted. During this period, some meat shipments which were ultimately destined to China were directly shipped there without going through Hong Kong. On the whole, there were not any big complaints by traders because the products were not perishable.
In the first four months of 2013, Hong Kong imported a total of 10,032 MT of U.S. pork products valued at $27 million. Chilled pork constituted a very minimal percent while the import values of frozen and processed pork were very close in the first four months of 2013.
The U.S. is the 4th largest supplier to Hong Kong in terms of value but the 7th in terms of volume. U.S. pork has been increasingly receptive in Hong Kong domestic market. In addition to establishing a firm foothold in the high end market, U.S. exporters are also supplying more economical cuts like butts to Chinese restaurants, raw boneless ham and picnic cuts to fast food chains. Hong Kong traders commented that they have found U.S. pork becoming more adaptive to market demand. The most noticeable change is the increased availability of lean meat. Consumers in Hong Kong and China are getting more health conscious and have preference for lean meat. Traders said that they now could find U.S. supplying 85 or even 90 percent chemical lean meat, which are highly sought after in Hong Kong. All these are positive factors favorable for U.S. pork exports to Hong Kong.
Over the years, U.S. pork exports to Hong Kong have been counteracted by U.S. direct exports to China. U.S. suppliers are selling increasingly more to China direct rather than going through Hong Kong particularly for shipments to the northern China. For shipments to the southern China, Hong Kong might still have some advantages given geographical proximity. U.S. pork shipments to Hong Kong have been dropping over the years while those for China have been on an upward trend. In 2010, Hong Kong and China accounted for 5 and 3 percent of U.S. pork and offal exports respectively, ranking as the 4th and 8th largest market. In 2013, China already overtook Hong Kong becoming the 4th largest export market for the U.S. pork and offals products, representing 10 percent of overall pork and pork product export trade. Meanwhile, Hong Kong ranked as the 8th largest export market with 3 percent market share as direct shipments to China become more common.
China is the largest supplier of pork products to Hong Kong. It exported 31,456 MT of pork products to Hong Kong valued at $120 million in the first four months of 2013, comprising of $11 million of chilled pork, $48 million of frozen and $61 million of processed meats. China was one of the few suppliers that managed to increase exports to Hong Kong between January – April 2012 and January – April 2013 (15% in volume). After a YOY 29 percent rise in unit price in 2012, the stable price in 2013 gave traders an impression that it is worth buying.
China is the largest supplier for chilled meats, accounting for over 95 percent of the import share by volume and 88 percent by value. They are imported as a substitute for freshly slaughtered pork. As the fresh pork prices have become more stable in 2013 accompanied by increased supply, the import volume of chilled meat declined. On the other hand, frozen meat from China, which is in competition with Brazilian meat, managed to rise 0.4 percent in terms of volume. However, the export value declined because the increase in volume was not big enough to offset the decreased unit price. Processed pork products constitute the chunk of China’s pork products to Hong Kong. The majority of food dumplings (dim sum) served in Hong Kong’s Chinese restaurants are made in China and they are classified as processed meats.
Brazil is the second largest pork supplier for the Hong Kong market, selling 27,848 MT of pork to Hong Kong valued at $79 million to Hong Kong in January – April 2013. Frozen meats constituted about $70 million or 88 percent of Brazilian exports to Hong Kong. Actually, Brazil is the largest supplier of frozen meats to Hong Kong, accounting 35 percent of the market share and far exceeding the second largest supplier, China, which has a market share of 24 percent. Their lean and well trimmed meats are well received in Hong Kong ranging from Chinese restaurants and fast food chains. In January – April 2013, their unit price slightly dropped 4 percent triggering a slight expansion of the market share from 34 to 35 percent in value.
In Hong Kong, European pork cuts such as belly and spareribs are very well received by caterers. In particular, Netherlands is a key supplier of pork belly for a popular dish in Chinese cuisine – roast pork and its price is far more competitive than that from the U.S.
In the first four months of 2013, about 31 percent of Hong Kong’s pork imports were re-exported and the percentage for offal re-export was even higher at 79 percent. Popular offal items re-exported to China include heart, tongue, neckbone, stomach, kidneys, etc. Major export markets include China, Vietnam and Taiwan.
Hong Kong’s re-export trade to China in early 2013 appeared sluggish because domestic supply had increased thus alleviating the demand for imported pork. Traders revealed that many pigs in China suffered from blue ear disease and unscrupulous farmers still put the infected pigs in the food chain. This could partly explain why the supply in China in early 2013 appeared to be abundant and prices were low. However, they estimate that the stock will start to become depleted and China’ demand for imported pork via Hong Kong will become more vigorous with firmer support for prices in the second half of 2013.
In the past year, Hong Kong did not introduce any new measures/regulations that impose threat on U.S. pork exports to Hong Kong