Pig disease jumbles pork-trade routes as Canada turns to China

Pig disease jumbles pork-trade routes as Canada turns to China
A deadly pig disease is helping turn the global hogs trade into a merry-go-round as Canada takes advantage of tariffs on U.S. produce to boost shipments to China, the world’s largest pork consumer.

Canadian pork exports to China soared 80 per cent in March as the spread of African swine fever forces the Asian nation to tap overseas markets, government data show. With Chinese tariffs on American pork still in place, Canada is importing more from the U.S. and shipping its own produce to China. All of that is curbing supply to Mexico.

“There’s a shift in export demand” for pork, Jayson Penn, chief executive officer of chicken producer Pilgrim’s Pride Corp., said at a BMO conference in New York this week. “Instead of going to Mexico, it’s going more to Canada as a substitute for Canada’s replacement of pork which was shipped to China.”

The changes in trade flows mirror what happened in the soybean market last year, with both Argentina and Canada importing more American soy to ship their own oilseeds to China due to tit-for-tat tariffs. As the virus that kills most infected pigs within 10 days spreads at a time the trade war is dragging on, traders are having to be creative to meet demand.

Canada shipped 33,456 metric tons of pork to China in March, compared with 18,628 tons a year earlier, data from Statistics Canada show. At the same time, it increased imports from the U.S. by 41 per cent.


Cattle ranchers boost exports to China ahead of pork shortage

To be sure, pork exports to China could suffer a setback after the Asian nation temporarily suspended export permits from two Canadian companies.

Pork-trade disruption is also having an impact on chicken. U.S. pork exports that were entering the Mexican market started to drop in the first quarter as shipments went to Canada. That helped alleviate pressure on Mexican chicken prices, said Penn, whose firm has a large presence in that market.

“Due to the lack of pork in Mexico, we saw some of the highest increase, quickest increase in pricing that we’ve seen as long as we’ve been in Mexico,” he told the BMO event. “We saw great response.”
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