China | USMEF Seeking Details of Possible China Pork Purchase Plan | Rumors o...

China

USMEF Seeking Details of Possible China Pork Purchase Plan

Rumors of a plan to make large volume purchases of imported pork to help stem high domestic pork prices have been circulating among the trade in China for the past week. This followed another surge in Chinese pork prices and the establishment of a multi-ministerial task force to deal with the issue.

USMEF believes discussion of the plan centers around the Ministry of Commerce (MOFCOM), the agency in charge of maintaining government stockpiles of pork that served decades ago as an important tool for smoothing seasonal price spikes in large urban areas. The reserve had lost much of its importance in recent years as pork production and incomes surged, and supply and demand forces kept relative pork prices low. This year, however, several factors – disease, a low in the hog cycle and surging demand – have created pork shortages and price spikes, raising alarms among China's leaders about general price inflation. Pork is a main component of China's consumer price index.

Details of the pork plan remain sketchy, but could involve allocation, through a bid process, of purchase quotas to a handful of Chinese private companies who would import and sell selected pork muscle cuts to the managers of the strategic reserve. Reports regarding the quantities and cuts sought have varied, but USMEF believes purchases may run into the tens of thousands of tons. USMEF Beijing reports a sense of urgency among officials to begin buying, but also notes the complexities of putting together a plan to import large quantities of pork muscle cuts. While China imports large volumes of pork variety meat, its imports of muscle cuts have been historically minimal. China only allows pork imports from a handful of countries including the United States, Canada, Denmark, Ireland and France.  

USMEF has informed Chinese officials of its members’ interest in supplying product, but also noted that recent residue findings by Chinese inspectors have increased supplier risk. According to Joel Haggard, USMEF senior vice president Asia-Pacific, "We have told the principals of the U.S. industry interest, but also that our full supply capabilities are hampered by recent Chinese inspection findings and product rejections.”

In other news, China ended a busy week of food safety actions, including the execution Tuesday (July 10) of its former food and drug chief for corruption. In a major position reversal, China announced Wednesday (July 11) that it was banning the use of diethylene glycol in toothpaste, a practice which had resulted in numerous countries pulling Chinese product. Until that announcement, China had strongly defended the safety of the ingredient, when used in small quantities.

Highlighting China's continued food safety challenges, the Hong Kong media reported Friday (July 13) that officials had raided a small food factory in Beijing that was mixing industrially treated cardboard with minced pork as ingredients in popular steam pork buns.

China

USMEF Seeking Details of Possible China Pork Purchase Plan

Rumors of a plan to make large volume purchases of imported pork to help stem high domestic pork prices have been circulating among the trade in China for the past week. This followed another surge in Chinese pork prices and the establishment of a multi-ministerial task force to deal with the issue.

USMEF believes discussion of the plan centers around the Ministry of Commerce (MOFCOM), the agency in charge of maintaining government stockpiles of pork that served decades ago as an important tool for smoothing seasonal price spikes in large urban areas. The reserve had lost much of its importance in recent years as pork production and incomes surged, and supply and demand forces kept relative pork prices low. This year, however, several factors – disease, a low in the hog cycle and surging demand – have created pork shortages and price spikes, raising alarms among China's leaders about general price inflation. Pork is a main component of China's consumer price index.

Details of the pork plan remain sketchy, but could involve allocation, through a bid process, of purchase quotas to a handful of Chinese private companies who would import and sell selected pork muscle cuts to the managers of the strategic reserve. Reports regarding the quantities and cuts sought have varied, but USMEF believes purchases may run into the tens of thousands of tons. USMEF Beijing reports a sense of urgency among officials to begin buying, but also notes the complexities of putting together a plan to import large quantities of pork muscle cuts. While China imports large volumes of pork variety meat, its imports of muscle cuts have been historically minimal. China only allows pork imports from a handful of countries including the United States, Canada, Denmark, Ireland and France.  

USMEF has informed Chinese officials of its members’ interest in supplying product, but also noted that recent residue findings by Chinese inspectors have increased supplier risk. According to Joel Haggard, USMEF senior vice president Asia-Pacific, "We have told the principals of the U.S. industry interest, but also that our full supply capabilities are hampered by recent Chinese inspection findings and product rejections.”

In other news, China ended a busy week of food safety actions, including the execution Tuesday (July 10) of its former food and drug chief for corruption. In a major position reversal, China announced Wednesday (July 11) that it was banning the use of diethylene glycol in toothpaste, a practice which had resulted in numerous countries pulling Chinese product. Until that announcement, China had strongly defended the safety of the ingredient, when used in small quantities.

Highlighting China's continued food safety challenges, the Hong Kong media reported Friday (July 13) that officials had raided a small food factory in Beijing that was mixing industrially treated cardboard with minced pork as ingredients in popular steam pork buns.