Rival pork exporters could benefit from China-EU trade tensions

SINGAPORE, June 17 (Reuters) – Pork suppliers from South America and the U.S. could gain market share in China if Beijing restricts imports from the European Union in response to escalating trade tensions, traders and analysts said.

Russia, increasingly a close trading partner of China that started exporting pork to China in February, could also step up meat shipments.

China’s commerce ministry said on Monday it had opened an anti-dumping investigation into imported pork and its by-products from the EU, after the bloc imposed anti-subsidy duties on Chinese-made electric cars.

Any impact on EU exports will take time to emerge. China has said the investigation could last more than a year.

“Brazil, Argentina and the U.S. can export more pork and offal to China if exports from the European Union are restricted,” Pan Chenjun, a senior analyst at Rabobank in Hong Kong, said.

“If the anti-dumping tax is too high, than shipments from other origins such as the US, Brazil and Argentina will increase.”

The U.S. Meat Export Federation (USMEF) noted U.S. pork faces retaliatory duties of 25% in China in response to steel and aluminum tariffs, however.

“It is unclear whether U.S. pork will still be at a tariff disadvantage compared to EU pork, as is the case today,” said Joe Schuele, vice president of communications for the USMEF.

Smithfield Foods, a unit of Hong Kong-listed WH Group ltd (0288.HK), opens new tab, is familiar with the impact of Chinese tariffs on U.S. pork and would welcome relief on that front, spokesman Jim Monroe said.

Anti-dumping duties could hit Europe hard as China’s pork purchases from Europe include parts such as feet, ears and offal that tend to only be used for pet food rather than human consumption in Europe.

Pan, however, said any impact on China’s market would be limited.

“We don’t see much impact on the local market in terms of supplies and prices if imports are restricted from the European Union. This is because China’s imports of pork and offal are just 5% of total consumption,” Pan said.