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Grain and the City: The Year of the (Very Expensive) Pig
Elena Neroba, Head of Data & Analytics at Marcopolo Commodities
When you play war, the most important thing is not to overplay your hand. Throwing with tariffs at one another and making the threats hit the fan could play a trick on you: until China was threatening the States with the decrease of soya consumption by means of changing the structure of the feed formula, the Big Celestial Pig sent their way something they could not have dreamt about in their worst nightmares: swine fever. 916 thousand pig lives down the road in China alone. Not talking about the neighbouring countries who have not escaped unscathed. And these are only official pigtails. All in all, according to preliminary estimates there have been slashed up to 23 MMT/year. And this is with unabating demand for pig meat. China was set to import 6 mio pigs/2,2 mio tons of pork this year, but these numbers are set to be revised. Consumption has decreased by 3,5 kg/capita. Clearly, the decrease in pork consumption will be made up for by upping, first and foremost, chicken meat consumption up to 9.2 kg/capita. Also, Chinese beef imports are set to increase up to 1,7 MMT in 2019. Those calculations are based on the assumption that the increase in the Chinese population will grow abt +0,4% per year.
Today there are two questions on the agenda: 1) where will Beijing shop for meat, consequently, where the internal grain and meal consumption is set to increase, and 2) crop situation (planting progress and weather) everywhere except South America where the harvest is made.
Let us now engage in an ungrateful, yet amusing, pastime — Tessomancy, or the art of reading tea leaves and coffee grounds. The more so, because logical thinking in a girl in nude So Kate pumps — is a contradictio in terminis.
Last year the geographical structure of pork imports to China looked like this: Spain 19%, Germany 16%, Canada 13%, USA 12%, Denmark 8%, and the Netherlands 8%. Brazil could hardly reach a 5% threshold.
In lieu of epilogue: fresh off the press — China refused a visa to Michael Pillsbury, informal counsellor to Trump on China supposedly as a countermeasure to avenge US visa refusal for Chinese scientists.
Do you guys smell it? The deal is in the air…
