After China effectively banned Canadian canola, and picked off 3 Canadian pork export establishments one by one, some in Canada\’s pork industry felt like it was only a matter of time before China effectively banned Canadian pork. This Tuesday, they effectively shut down the $1.25B market outright.
Pork is a staple of Chinese diet, and the Chinese market both produces and consumes roughly two-thirds of the world\’s pork. China\’s ban comes in the midst of an African Swine Fever epidemic which shrank the country’s pig population by 1M since August 2018, and up to 200,000 this year, due to disease and culls. This in addition to a 62% increase in tariffs on US pork (as a consequence of the US-China trade war earlier this year), caused an increase in pork prices 40% or more year-to-date, and availability in some areas is scarce.
Canadian and European pork producers have so far been well-positioned to take advantage of rising pork prices in China, and several Latin American countries are preparing to increase or start exporting to China as well. The difference is Meng Wanzhou and Ren Zhengfei, of Huawei fame, on which plenty of interesting coverage, speculation, and conspiracy theories can already be found. Meng was arrested in Canada pursuant to extradition on a US warrant. Both her and her father Ren hold an incredible amount of power and status in China, and are important enough for the Chinese government to create a high level of turbulence and discomfort inside and outside its borders.
How the Canadian meat ban will affect Canadian meat producers will depend on their ability to quickly expand sales to alternate markets, finding a home for tens of thousands of tonnes of pork that was until yesterday promised to China at an attractive price.