BOABC Viewpoint: China suspended export licenses for two Canadian pork exporters

Recently, China suspended export licenses for two Canadian pork exporters due to problems related to the labeling of pork exported to China, including contents, weight, and origin. What impact will the event have on the trade between China and Canada?
 
China imported about 1.19 million tons of pork in 2018, and the imports from Germany, Spain, Canada and Brazil respectively accounted for 19%, 18%, 13%, and 13% of the total. Among the exporters, Canada ranked third, so the reduction of pork imports from Canada will have some impact on China. However, China may increase imports from other countries to offset the impact. In the first quarter of 2019, China’s pork imports from Brazil rose by 28% year-on-year, and the imports from the EU increased by 20%-40% from the year earlier.
 
According to the pork exports data released by Canada Pork Council for January to October, 2018, China, the US, Japan, and Mexico were the main importers of Canadian pork, and the exports to these countries respectively accounted for 27%, 26%, 23%, and 10% of Canada’s total pork exports. From 2012 to 2018, China’s imports of Canadian pork were increasing year by year, and China has become the largest importer of Canadian pork. In addition, pork produced in Canada is mainly for exports, which account for about 70% of its total capacity. If China reduces pork imports from Canada, it will have a greater impact on Canada’s pig industry.
 
At present, pork supply is seriously insufficient in China for the outbreaks of African swine fever, and pork imports surge, which is a big opportunity for large global pork producers. If Canada takes a positive attitude to resolve the incident, it will be a good news for the economic and trade exchanges between the two countries, and the trade relationship between China and Canada may be repaired to some extent.