Commodities and Futures News

Beijing’s butchers a glum bunch as Lunar New Year meat sales slow

2024.02.07 06:17

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© Reuters. Pork sellers attend to prospects on the Xinfadi wholesale market in Beijing, China February 2, 2024. REUTERS/Mei Mei Chu

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By Mei Mei Chu

BEIJING (Reuters) – The butchers within the Xinfadi wholesale meals market, Beijing’s largest, slouch on stools behind counters stacked with meat, sometimes trying up from their smartphone movies to name out to the few consumers idly passing below the market’s Lunar New Year decorations.

“This time last year, this hall would be squeezed so full of people that you could not move,” said a pork seller named Li, who used to sell 20 pigs a day in the holiday run-up but this year is selling just five a day.

The lead up to the Lunar New Year should be Xinfadi’s busiest time of year but the sluggish sales reflect the deeper malaise that has settled over the Chinese economy, the world’s second-largest. This year, pensive consumers are tightening their belts amid uncertain employment prospects, especially for younger people, a plunging stock market and declining property values.

The holiday, also known as the Spring festival, should see people in the world’s largest pork consuming nation stock up as families reunite over feasts including fish, dumplings and cured sausages, but demand this year is lacklustre, ten meat and seafood sellers inside Xinfadi told Reuters.

“It is getting worse year after year. There are fewer people shopping and people are buying less,” said Li, who only gave his surname.

China has struggled to mount a strong post-COVID pandemic recovery, with weak consumer and business confidence, mounting government debt and slowing global growth weighing on jobs, activity and investment.

The International Monetary Fund forecasts China’s economic growth to slow to 4.6% in 2024, from 5.2% in 2023, and decline further in the medium term.

“Shrinking meat consumption is a symptom of an financial downturn,” said Ma Wenfeng, senior analyst at Beijing Orient Agribusiness Consultancy.

Shanghai-based agro-consultancy JCI pegs China’s 2023 pork consumption at between 53 million to 54 million metric tons, lower than its 10-year average of between 54 million to 55 million tons. JCI analyst Rosa Wang said 2024 pork consumption is likely to remain around 54 million tons or lower.

Gro Intelligence predicts China’s meat consumption growth will slow in 2024 after increasing by 3.6% in 2023.

“As a result, China’s meat import volumes are facing downward pressure,” it said.

Data from the U.S. Department of Agriculture estimates China’s pork and chicken consumption in 2024 to decline by 2.5% from a year ago, while beef and veal consumption is seen rising by 1.6%.

OVER-EXPANSION

Weak demand has put farmers and traders under pressure after aggressive expansion in recent years led to a surplus of pork and poultry, prompting Beijing late last year to buy tens of thousands of tons of pork for its state reserves to lift pork prices.

Wholesaler Jin Tao said narrowing margins have forced several vendors in Xinfadi to shutter.

“Five years in the past, this market might promote as much as 4,000 hogs a day throughout Spring Festival. Now, we won’t even promote 2,200 heads,” Jin mentioned.

Chicken vendor Ma Huolu mentioned Spring Festival sales have dropped by 30% from a yr in the past after restaurant closures hammered wholesale orders. A seafood vendor, who declined to be named, mentioned some days she is unable to promote even one fish.

Longer time period, China’s falling inhabitants, down for a second consecutive yr in 2023, has raised issues about demand from the world’s high meals importer and people repercussions on the worldwide agriculture industries.

Total meat imports have plunged from a peak of 9.91 million tons in 2020 to 7.38 million tons in 2023 amid greater home manufacturing, in line with customs knowledge.

An increasing center class and an ageing inhabitants has additionally meant many health-conscious diners are switching from meat to options such as tofu.

In Xinfadi, Li sighed as he weighed a pork stomach slice for a shopper.

“Customers used to buy two or three pieces of belly. Now even the pork ribs are not moving, this is a really difficult year.”

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