UTRECHT, NETHERLANDS — Disease pressures and trade vulnerabilities stand in the way of a fully optimistic outlook for global pork markets; however, a better cost environment and resilient demand help bolster the forecast, according to RaboResearch’s new quarterly pork report.

Global trade is facing challenges from geopolitical tensions. Adding to those hurdles is China’s antidumping probe into EU pork imports, launched in June. As China is the world's largest pork importer and the European Union’s main export destination for pork, the consequences of this move could impact the EU market and create a ripple effect across the globe.

“A suspension of EU exports or high tariffs could mean global pork trade flows are rerouted as China finds new origins and EU exports flow to other regions,” said Chenjun Pan, senior analyst of animal protein at RaboResearch. “If EU exporters offer discounts to capture new markets, importing countries may need to support and protect local producers. Meanwhile, other exporting countries may find their traditional trade partners shift to cheaper EU pork products.”

With the United States and China increasing tariffs on several commodities in 2018, trade patterns have already begun to shift. The United States lost its competitiveness with China due to higher tariffs, while Brazil surfaced as the greatest beneficiary, increasing its exports by 90% between 2018 and 2023.

Adding to the uncertainty of global trade over the coming years is the upcoming US presidential election that could bring changes in US trade policy.

“With rising concerns over trade disruptions given these geopolitical complexities, many governments have supported improvements in domestic production to increase self-sufficiency and reduce reliance on imports,” Pan said.

Technology adoption is one way traditional importing countries can improve productivity and scale up production. Global trade could be trending toward more fragmentation rather than more concentration as exporters and importers alike diversify sourcing to better manage potential risks of trade disruptions, the RaboReseach report said.

On a brighter note, after several months of decline, the global sow herd showed signs of stabilizing and even rebounded in some regions.

Some countries, such as China, Vietnam and the Philippines, will see tight pork supply in the second half of 2024 due to disease outbreaks, according to the report. Other regions, including the European Union and the United States, will likely see pork supply increase slightly.

“Sow herd recovery will likely be faster than expected, especially in the EU and China,” Pan said. “Productivity gains will continue despite recurrent disease issues in some regions.”

Encouraging herd expansion is the ample global supplies of grains and oilseeds that should pressure feed prices in the second half of the year.

“Earlier supply contraction and lower feed costs in most regions have improved farming profitability, along with productivity gains,” Pan noted. “Producers in some regions have started to rebuild sow herds, anticipating declining feed prices and growing demand.”

Global consumer pork demand is relatively resilient, driven by a mixture of factors, including easing inflationary pressure, slower economic growth, competitively priced proteins and seasonal changes, according to RaboResearch. Easing pork prices in the European Union and weak prices in the United States will likely support consumption in these regions.