GERMANY - Pig production is becoming more and more an international business and the Chinese market is emerging as an important outlet for pig meat - especially the fifth quarter products, writes Chris Harris.
Speaking at the International Pig Event and Third Chinese -European Pig Summit at EuroTier in Hanover, Erik Thijssen, president of the European Pig Producers said the importance of the Chinese market is growing and pig production is expanding but the country is also facing numerous challenges.
"The Chinese market is important to create value for the fifth quarter," Mr Thijssen said.
"The developments in the Chinese market are tremendous at this time. China has shown years of double digit growth figures in their economy, the increase of the disposable income is creating the possibility for more and more people to favour more meat and especially more pork in their diet.
"The development creates great opportunities for pig production."
However, Mr Thijssen said that the growth in popularity in pork and the growth in demand can only be met in China with a change in production methods.
He said that where the back yard system of production is the most prevalent at present, Chinese pig production needs to change to a modern integrated and controlled system to meet consumer demands.
He said that the modern consumer will not only demand guaranteed availability of pig meat but also that it is safe to eat "without antibiotics or other health threatening substances".
Mr Thijssen said that on the global market the countries that will lead the way in pig production with be those that have a good feed supply.
"The developments on the market for feedstuffs have shown some remarkable changes in the last few years," he said.
Lower production due to weather extremities in different parts of the world, the introduction of bio-based energy, such as bioethanol and biogas and a higher demand of feedstuffs have all had their impact on the pig market.
However, he added that the introduction of venture capital into the feedstuff market particularly as the financial crises in the US and Europe have developed have had an even greater effect on the pig market.
"The result is that prices are driven up by speculation and ships with soya or corn on their way to their destination are sold more than 10 times during that trip," he said.
He said that producers have to deal with the higher feed prices in the short term.
He said it is impractical to end the speculation but it could be possible for producers to options and futures to keep a grip on production costs.
Mr Thijssen added that pig producers are also having to meet the challenges presented by lobbying groups on issues such as animal welfare and the environment.
"To meet society requirements, farmers have to invest and grow to keep a profitable business," he said.