COMMODITIES 2025: Pork seen as lead meat protein in 2025 amid output challenges, tariff uncertainties

This is part of the COMMODITIES 2025 series where our reporters bring to you key themes that will drive commodities markets in 2025.

Pork is expected to continue as the leading meat protein consumed in 2025, with its consumption in Asia, the leading consuming region, being influenced by African swine fever management and government interventions aimed at enhancing producer prices, which will affect domestic supply and import requirements.

On the supply side, the two largest global exporters, the EU, and the US, could see their competitiveness in the Chinese market weakened if China imposes new tariffs on products from these sources amid potential new trade disputes. Russia could emerge as a significant new supplier, while Brazil is likely to expand its market share.

Philippines boosts pork trade via tariff cuts, ASF management

Since the first case of African swine fever was detected in China in 2018, the disease has spread throughout Asia, significantly influencing the trade dynamics of pork.

The Philippines has retained a 15% in-quota tariff on pork, down from the standard 30%. This reduced rate will remain in effect until 2028, along with accreditation for exporters from Brazil, Germany, Hungary, and Poland for a period of three years. Additionally, a government-controlled ASF vaccine program has distributed 10,000 doses since August 2024, with plans to release another 150,000 doses to meet local demand.

Data from the National Meat Inspection Service shows that the Philippines' frozen pork inventory decreased by 28%, dropping from 72,714 mt in January to 52,041 mt in June. This decline is attributed to the delayed release of the Minimum Access Volume, which limits pork imports at a lower volume for reduced tariff rates, as well as the impacts of ASF, according to the US Meat Export Federation. However, it rebounded to 100,073 mt by November, supported by increased imports from Brazil.

The Philippines has now overtaken China to become Brazil's leading pork importer, with robust demand projected to persist through 2025, depending on the ASF situation in the Philippines, according to local sources.

South Korea's pork market faces uncertainty

In 2025, the South Korean domestic market is facing several challenges, including rising inflation, a weakened Korean Won, political instability, and a shift in consumer behavior from dining out to home cooking, according to market sources. The Korean Won depreciated 4.3% against the US dollar between Nov. 1 and Dec. 18 to trade at 1,437.1. During this timeframe, two significant events unfolded: Donald Trump's victory in the US election and the impeachment of South Korea's president in the wake of a martial law crisis.

This uncertainty has left Korean pork importers unsure about the industry's future, complicating their decisions for Q1 2025 imports amid weak domestic demand and unfavorable exchange rates.

Additionally, the National Tax Service of Korea reported that over 15,800 businesses in Seoul shut down during Q2 2024, representing a 20% increase compared to the pandemic period, which reflects a bearish sentiment in the domestic market.

EU pigmeat production faces mixed fortunes

EU-27 production levels are projected to decrease by 0.5% compared to 2024, with mixed outlooks across producers.

Spain, which represents nearly a quarter of the EU's pigmeat production, is projected to see an increase in output, driven by herd growth.

However, Spanish producers are poised to face a challenging start to the year, as new animal welfare regulations will be implemented in March 2025. Among other provisions, Royal Decree 159/2023 sets forth the minimum space requirements for swine based on their live weight. According to sources, producers are still evaluating how to adjust their operations to comply with these regulations while assessing the potential impact on the livestock population.

In addition, both Denmark and Poland are anticipated to experience year-on-year increases in their production figures.

In contrast, Germany, the second-largest pigmeat producer in the EU, is likely to experience a decline in production due to herd contraction and stringent environmental regulations. Similar challenges are anticipated for other key producers, such as France and the Netherlands.

Feed costs in the EU are unlikely to pose immediate cost pressures. The potential disruption in the soymeal supplies has been postponed due to a one-year delay in the implementation of the EU Deforestation Regulation.

EU exports navigate weaker demand, tariff uncertainties

The year 2025 presents a significant challenge for EU-China trade, the most robust trade relationship in the global market, involving the world's largest exporter, the EU, and China, the largest importer.

EU's exports are projected to decline year-over-year due to reduced production and as a rebound in Chinese demand is not anticipated in 2025.

In June 2024, China officially launched an antidumping probe into the EU pork imports intended for human consumption, including frozen cuts and offal. The investigation, which followed the intention of EU policymakers to impose additional tariffs on Chinese electric vehicles, should be completed within one year after initiation, according to the WTO.

Increasing EU exports to other markets, such as the UK, South Korea, and the Philippines, are anticipated to partially offset the reduced demand from China in 2025.

Russia's ambitions: grain powerhouse to emerging pork exporter

Russia is poised to become a key player in the international pork market in 2025. After beginning pork exports to China in 2024, Russia exported over $40 million during the period from January to October 2024, according to data from China Customs.

Russia is positioning itself as a significant alternative source in this market, particularly for European products, should tariff tensions between China and the EU persist.

With the strategic advantage of being a powerhouse in grain production, Russia could overtake Spain to become the world's fourth-largest pork producer. In 2024, Russia's pork sector saw several major acquisitions, consolidating key companies and expanding production capacity. This development is expected to drive greater efficiency in production heading into 2025, strengthening Russia's competitiveness on the global stage.

US pork exports surge amid tariff concerns, Brazil's output rises

US pork exports remained strong through 2024, particularly to standard markets such as Mexico but also gaining market share in South Korea and Japan. This trend is set to continue into 2025.

Tariffs are expected to be a significant challenge in 2025, following President-elect Donald Trump's proposal to introduce new tariffs on imports from the US' largest trading partners, including Mexico and China — two of the biggest importers of American pork.

On the production side, US hog producers are benefiting from significant margin relief, driven primarily by low feed costs.

Meanwhile, Brazilian production is expected to continue its upward trend, with a projected increase of 1.5% heading into 2025. This growth is supported by new access to export markets and an expanding market share in key global regions.

Platts Pork Belly assessments

Platts pork assessments represent the top exporting and importing regions: EU Pork Marker FCA Barcelona in Eur/mt and USD/mt and Pork Belly CFR North Asia in USD/mt.

Since the assessment launched on Nov. 1, 2024, the EU Pork Market for frozen, skinless, and boneless pork belly has remained fairly stable in euro terms between Eur4,190/mt and Eur4,210/mt. Demand from Japan, South Korea, and the Philippines was strong, but the European market was the most active for Spanish meat exporters as year-end holidays approached. Due to solid demand in Europe, exporters chose to sell fresh products rather than freeze them.

"Fresh products are more profitable than frozen," a Catalonia-based pork meat exporter said.