Required Report - public distribution

**Date:** 9/30/2004

**GAIN Report Number:** CH4046

CH4042

**China, Peoples Republic of**

**Livestock and Products**

**Annual Livestock Reports-Final**

**2004**

**Approved by:**

![](media/image1.wmf)Maurice House

U.S. Embassy

**Prepared by:**

Casey Bean/Zhang Jianping

**Report Highlights:**

Since December 25, 2003, China has banned imported US beef and products
due to the single BSE case in the United States.  It is still uncertain
when China will reopen the market. China\'s strong demand for dairy and
beef cattle, now supplied by only Australia and New Zealand, is due to
the country\'s booming dairy sector driven by rising consumption of both
dairy products and beef.  China\'s consumption of beef and pork is
forecast to continue climbing due to strong growth in per capita income.

Includes PSD Changes: Yes

Includes Trade Matrix: Yes

Annual Report

Beijing \[CH1\]

\[CH\]

Table of Contents

[**Executive Summary 3**](#executive-summary)

[Cattle and beef 4](#cattle-and-beef)

[Production continues strong 4](#production-continues-strong)

[Government policy now targets both dairy and beef
4](#government-policy-now-targets-both-dairy-and-beef)

[Beef cattle a profitable business driving live cattle and genetic
product imports
5](#beef-cattle-a-profitable-business-driving-live-cattle-and-genetic-product-imports)

[Production constraints limit beef sector growth
5](#production-constraints-limit-beef-sector-growth)

[Consumption forecast to rise 6 percent in 2005
5](#consumption-forecast-to-rise-6-percent-in-2005)

[Beef price up 8 percent and may remain high into the first quarter of
2005
6](#beef-price-up-8-percent-and-may-remain-high-into-the-first-quarter-of-2005)

[Official ban on feeding ruminant meat and bone meal to ruminants
6](#official-ban-on-feeding-ruminant-meat-and-bone-meal-to-ruminants)

[China\'s ban impacts \$108 million in US beef and products exports
6](#chinas-ban-impacts-108-million-in-us-beef-and-products-exports)

[Beef exports forecast to increase 11 percent in 2005
7](#beef-exports-forecast-to-increase-11-percent-in-2005)

[Swine and Pork 17](#swine-and-pork)

[Swine and pork production increases due to strong demand and
poultry meat safety concerns
17](#swine-and-pork-production-increases-due-to-strong-demand-and-poultry-meat-safety-concerns)

[Hormones are not allowed in feeds; swine demand fuels feed use
17](#hormones-are-not-allowed-in-feeds-swine-demand-fuels-feed-use)

[Consumption 18](#consumption)

[Average prices up 8 percent for swine, 11 percent for piglet and 13
percent for pork from January to July Marketing Subcategory
18](#average-prices-up-8-percent-for-swine-11-percent-for-piglet-and-13-percent-for-pork-from-january-to-july-marketing-subcategory)

[New import quarantine regulation concern
19](#new-import-quarantine-regulation-concern)

# Executive Summary

Since December 25, 2003, China has banned imported US bovine and bovine
products due to the one case of BSE in the United States.  It still
remains uncertain when China will lift the bans.  During 2004, USDA
provided Chinese officials with information about the US mitigation
measures on BSE, and a Chinese BSE technical team visited the United
States during September 2004.  China is reviewing this information as
part of its own risk assessment process.  

If China\'s BSE concerns on US bovine products were alleviated, the
Chinese Government would then revise its domestic law, a lengthy
procedure involving the Ministry of Agriculture, the General
Administration of Quality Supervision Inspection and Quarantine (AQSIQ),
the Ministry of Health, the State Food and Drug Administration and
ultimately the State Council.  

As a result of these factors, the PSD table in this report reflects zero
imports of US beef and products during 2004 and 2005.  The Chinese
Government indicates that bovine semen, embryos and protein-free tallow
products deemed as non-risk under the OIE guidelines would be the first
products they will approve for market access. 

China\'s beef production for 2005 is forecast at 7.1 MMT, a 6 percent
increase from this year due to continued strong beef demand and rising
incomes.  Live cattle imports for 2005 are forecast to increase 50
percent from 100,000 to 150,000 head driven by China\'s surging dairy
industry and the need for better genetics by both the dairy and beef
cattle sectors.  Beef imports in 2005 are forecast at only 15,000 MT, a
significant decline from the previous high of 25,000 MT in 2003, due to
China\'s continued ban on US and Canadian beef coupled with higher
international beef prices.  

China\'s beef exports are forecast to increase from 43,000 MT to 45,000
MT because of increased demand in Hong Kong.   Live cattle exports
during 2005 are forecast to increase sharply from 55,000 head to 60,000
head, an increase of 9 percent due to demand from Hong Kong increase.  

Pork production during 2005 is forecast to increase to 49 MMT**.**
Farmers continue to increase pork production due to strong consumer
demand and rising incomes.  Pork imports in 2005 are forecast at 122,000
MT, an 18 percent decline from 2004 as the result of increased domestic
supplies and higher international prices. China\'s pork exports during
2005 are forecast to increase from 330,000 MT to 440,000 MT due to
strong demand from Hong Kong, North Korea and Japan.  China lost export
share to Russia due to its import quota limit, but this loss will be
compensated by export gains in the other markets.

China announced a new import meat quarantine regulation (please refer to
FAS Beijing\'s report CH4032).  Effective November 1, 2004, all meat and
poultry products re-exported through Hong Kong must be pre-inspected by
the China Inspection Company based in Hong Kong before entering the
mainland.  The purpose of the new law is to reduce smuggling of
products.  The new regulation could potentially benefit US meat because
non-US meat often enters China in US carton boxes accompanied by a false
U.S. export certificate after repackaging in Hong Kong.  The new
inspection policy could also lead to more direct imports into Mainland
China.  

To derive trade figures, FAS Beijing uses the Global Trade Atlas (GTA)
data provided by the USDA, and then we add Hong Kong re-exports to the
mainland from World Trade Atlas (WTA) data.  China\'s customs data no
longer provides re-exports from Hong Kong.

# Cattle and beef 

## Production continues strong 

China\'s beginning stock of cattle for 2005 is forecast to increase 3
percent from 135 million head to 139 million head.  The number of
slaughtered beef is forecast to increase 6 percent from 47 million head
to 50 million head in 2005.  Beef production for 2005 is forecast to
increase 6.4 percent from 6.7 million MT 2004 to 7.1 million MT. The
increase in beef production is driven by strong domestic demand
and rising incomes.

The National Statistic Bureau (NSB) announced that, in the first half of
2004, China\'s GDP growth was 9.7 percent over the same period of 2003.
 Real per capita disposable incomes in urban areas increased 8.7 percent
and per capita cash incomes for farmers increased 16.1 percent over the
same period of the previous year.  A nationwide crackdown on delaying or
denying payments to farmers employed at urban construction sites has
helped millions of farmers obtain their payments on time.  The Ministry
of Commerce (MOFCOM) stated that the catering industry sales witnessed a
24 percent growth within the first 6 months reaching \$40.76 billion.
 The strong economy has translated into consumption of more nutritious
food including meat. However, beef production lags demand, especially
high quality beef, and China\'s beef production will continue climbing
during the foreseeable future.  

The beef consumption increase was also because HPAI outbreaks have made
many consumers switch to red meat.  In response to China\'s ban on U.S.
beef, many consumers who ate US beef now consume more domestic
beef because beef supplied by other exporting countries does not fill
the supply gap.  

There are 8 main beef producing provinces, accounting for 70 percent of
the total production.  The top three provinces are Henan, Shandong and
Hebei.  They are also major grain producing provinces.  Beef marketing
areas mainly include Beijing, Tianjin, Fujian Province and Guangdong
Province.  

## Government policy now targets both dairy and beef 

Government policy now gives equal importance to both dairy and beef,
instead of focusing on dairy, in order to quicken grass-fed animal meat
production and reduce the feed grain burden.  The provinces located in
the advantageous beef production regions selected by the Government are
all trying to strengthen beef cattle genetic improvement.  As a result,
imports of live breeding cattle, both dairy and beef, are forecast to
rise in the next couple of years.  

The Government has also decided to phase-out agricultural taxes within
five years.  However, some wealthier provinces and large cities have
quickened the reforms.  Recently, some grain production provinces
started providing direct subsidies to grain farmers.  The policy has
resulted in higher grain production, in part due to more favorable
weather.  Official data has already shown that summer grain for 2004
increased 4 percent over the same period of 2003, the first time after
five years of grain production decreases.  This will benefit beef
production, as more and more grain feed will be used for cattle due to
grassland deterioration and forage shortages.

Per capita beef consumption in China is only about 5 kg, far below the
US average.  Low per capita beef consumption, strong demand, combined
with favorable government policies and steadily increasing exports,
provide room for beef production growth in the future.

## Beef cattle a profitable business driving live cattle and genetic product imports

China is 95 percent self-sufficient in beef supply.  China\'s current
profit and loss for grain and beef conversion is 2:1.  The production
costs are much lower than the US or other competitor countries. Although
feed prices have gone up considerably in China, beef prices have moved
above feed prices.  Cattle and beef production is generally profitable
for farmers.  In Hunan province, beef cattle can earn RMB 300-500
(\$36-60) per head.  Most beef cattle are raised on small-sized
household farms.  

China\'s live breeding cattle imports for 2005 are forecast to increase
from 100,000 head to 150,000 head.  Imports for the first 6 months of
2004 already exceeded the total number of the whole year of 2003.  The
sharp increase of live cattle imports is driven by the urgent need for
genetic improvement of both dairy and beef cattle.  

However, the pace of import growth may slow down because MOA recently
revised its regulation on breeding cattle import stating that live
breeding animal imports shall comply with Chinese laws and with breeding
need and operation capacity.  Importers shall present a feasibility
breeding plan when applying for breeding animal imports. This process
may give the Government the power in the future to reject issuing import
permit to those trying to import commercial cattle under the name of
breeding animals to escape the customs tariff, or whenever the
Government thinks breeding need is enough or breeding operation of
importers is not qualified.  

Australia and New Zealand dominate exports to China and will continue to
dominate in the next couple of years due to their BSE-free situation and
their competitive prices for Chinese importers.

## Production constraints limit beef sector growth

Although the Chinese Government and industry have made great efforts to
spur beef production, overall growth is forecast to remain
slow, especially for high-end beef.  Several factors explain why.  China
has altogether 287 million ha of usable grassland.  However, grassland
animal husbandry only accounts for a very small part of the total
agriculture share due to grassland deterioration.  In Inner Mongolia, 37
out of 64 million ha of grassland has deteriorated. China is also facing
serious shortages of water and energy.  Overheated operations
in China\'s industrial sector have impacted energy supplies across the
country.  This year the Government has to limit electricity consumption
during the summer.  Water prices also rose considerably in July this
year.  Slow genetic improvement resulted in lower carcass weight.  Beef
processing also lags demand, especially for high-end consumers.  As a
result, the high-end beef market has to be satisfied by imports.

## Consumption forecast to rise 6 percent in 2005 

China\'s total domestic beef consumption for 2005 is forecast to grow 6
percent from 6.6 million MT in 2004 to 7 million MT in 2005. However,
per capita consumption is only about 5 kg, far below other
countries.  According to MOA, Shanxi Province is the lowest consuming
province with only 0.08 kg in volume and RMB 6.00 in value
during January to June 2004.  Consumption varies greatly from province
to province.  Of total red meat consumption, the ratio of beef in
Beijing, Jilin and Hebei provinces is over 20 percent of total meat
consumption due to higher incomes and better access to beef, while in
the west regions like Xinjiang, the beef ratio accounts for nearly 50
percent due to traditional cuisine and the production structure.  

In recent years, public awareness of food safety has intensified.
The media increasingly exposes food poisoning cases.  In response to
this, MOFCOM recently required that all beef cattle be slaughtered in
registered slaughtering plants designated by the Government.  

## Beef price up 8 percent and may remain high into the first quarter of 2005 

According to MOA data, China\'s average beef price during the first six
months in 2004 rose over 7 percent from the same period of 2003.  The
growth pace is the same as post\'s estimate in the previous semi-annual
report.   Beef prices may continue to rise into the first quarter of
2005 as three major public holidays are approaching.  During these
periods meat consumption is normally high.  The new grain crop may also
help ease prices unless farmers try to hold their grain anticipating
higher prices, or because the Government increases grain exports.

## Official ban on feeding ruminant meat and bone meal to ruminants

MOA recently announced the Measure of Safety and Hygiene Administration
on Animal Origin Feed Products, which becomes effective on October 1,
2004.  This ban on use of ruminant animal MBM to ruminant animals is not
new since China implemented such ban on April 2001, but this was only a
one-page notice sent to provincial agricultural bureaus, livestock
bureaus and feed offices. The new announcement intends to strengthen
governmental management on feed hygiene of the whole industry.  All
processing plants involved in animal origin feed production shall
re-register within 6 months in order to receive production qualification
approval from the government.  Unqualified producers will be driven out
of business.

## China\'s ban impacts \$108 million in US beef and products exports

The United States was the largest beef supplier to China until December
25, 2003 when China suspended imports due to the single BSE case in the
US.  Regarding beef imports, China does not differentiate BSE countries
with one case from countries or regions with many cases such
as Europe.  Based on US export figures (DOC) during January to June
2004, China\'s ban impacted \$108 million in US sales through direct
exports to the Mainland or Hong Long re-exports in 2004 (including beef
and offal).  

Despite ongoing efforts by USDA, it is still uncertain when China will
reopen its export market for U.S. beef.  The US Government has provided
the Chinese answers to two questionnaires on the US BSE situation.   The
US Meat Export Federation (USMEF) has organized technical seminars on
the safety of US beef and products.  During September 2004 a Chinese BSE
team visited the US to gather additional information.  According to
Chinese officials, any import approvals would initially be limited
to bovine non-risk products, including bovine semen and embryos and
protein-free tallow. 

China\'s beef imports for 2004 are expected to decrease sharply by 60
percent from 25,000 MT in 2003 to 10,000 MT due to the ban on
imported US products.  Beside higher price concerns, China has also
apparently slowed issuance of import quarantine permits after the BSE
outbreak in the US.  Although Australia and New Zealand have replaced
the US market share, the supply gap has not been filled.

Trade disputes over imported meat quality between China and New Zealand
led to the Chinese Government suspending issuance of new import
quarantine permits. 

## Beef exports forecast to increase 11 percent in 2005 

China\'s beef exports during 2005 are forecast to increase 10 percent
from 2004 to 50,000 MT due to increased demand in Hong Kong, Japan,
Russia and Kuwait.  However, the Russia number may be lower if it does
not re-open its market recently closed due to food and mouth disease
concerns about China.    

According to MOA, the main beef exporting provinces are Henan, Shandong,
Jilin, Hunan and Guandong, accounting for 79 percent of total beef
exports.  Over 91 percent of beef exports are under \"general trade\"
and the other 8.4 percent are processed exports. China\'s beef exports
are expected to increase gradually as the country\'s beef cattle
genetics improve.

  ---------------- ---------- ---------- ---------- ---------- ---------- ---------- --------- -------
  **PSD Table**                                                                                

  **Country**      **China,                                                                    
                   Peoples                                                                     
                   Republic                                                                    
                   of**                                                                        

  **Commodity**    **Animal                                    (1000                           
                   Numbers,                                    HEAD)                           
                   Cattle**                                                                    

                   2003       Revised    2004       Estimate   2005       Forecast   UOM       

                   USDA       Post       USDA       Post       USDA       Post                 
                   Official   Estimate   Official   Estimate   Official   Estimate             
                   \[Old\]    \[New\]    \[Old\]    \[New\]    \[Old\]    \[New\]              

  **Market Year               01/2003               01/2004               01/2005    MM/YYYY   
  Begin**                                                                                      

  Total Cattle     130848     130848     133023     134672     133875     138712     (1000     
  Beg. Stks                                                                          HEAD)     

  Dairy Cows Beg.  6873       8932       8300       11522      0          14863      (1000     
  Stks                                                                               HEAD)     

  Beef Cows Beg.   58846      60501      59000      62830      0          65340      (1000     
  Stocks                                                                             HEAD)     

  Production (Calf 48000      51654      48860      54649      0          54819      (1000     
  Crop)                                                                              HEAD)     

  Intra EC Imports 0          0          0          0          0          0          (1000     
                                                                                     HEAD)     

  Total Imports    50         50         50         100        0          150        (1000     
                                                                                     HEAD)     

  TOTAL Imports    50         50         50         100        0          150        (1000     
                                                                                     HEAD)     

  TOTAL SUPPLY     178898     182552     181933     189421     133875     193681     (1000     
                                                                                     HEAD)     

  Intra EC Exports 0          0          0          0          0          0          (1000     
                                                                                     HEAD)     

  Total Exports    50         50         48         55         0          60         (1000     
                                                                                     HEAD)     

  TOTAL Exports    50         50         48         55         0          60         (1000     
                                                                                     HEAD)     

  Cow Slaughter    0          0          0          0          0          0          (1000     
                                                                                     HEAD)     

  Calf Slaughter   0          0          0          0          0          0          (1000     
                                                                                     HEAD)     

  Other Slaughter  45015      47030      47260      49914      0          53051      (1000     
                                                                                     HEAD)     

  Total Slaughter  45015      47030      47260      49914      0          53051      (1000     
                                                                                     HEAD)     

  Loss             810        800        750        740        0          500        (1000     
                                                                                     HEAD)     

  Ending           133023     134672     133875     138712     0          140070     (1000     
  Inventories                                                                        HEAD)     

  TOTAL            178898     182552     181933     189421     0          193681     (1000     
  DISTRIBUTION                                                                       HEAD)     

  Calendar Yr.     2          2          0          0          0          0          (1000     
  Imp. from U.S.                                                                     HEAD)     

  Calendar Yr.     0          0          0          0          0          0          (1000     
  Exp. to U.S.                                                                       HEAD)     
  ---------------- ---------- ---------- ---------- ---------- ---------- ---------- --------- -------

#  

# 

  ---------------- ---------- ---------- ---------- ---------- ----------- ---------- --------- -------
  **PSD Table**                                                                                 

  **Country**      **China,                                                                     
                   Peoples                                                                      
                   Republic                                                                     
                   of**                                                                         

  **Commodity**    **Meat,                                     (1000 MT                         
                   Beef and                                    CWE)(1000                        
                   Veal**                                      HEAD)                            

                   2003       Revised    2004       Estimate   2005        Forecast   UOM       

                   USDA       Post       USDA       Post       USDA        Post                 
                   Official   Estimate   Official   Estimate   Official    Estimate             
                   \[Old\]    \[New\]    \[Old\]    \[New\]    \[Old\]     \[New\]              

  **Market Year               01/2003               01/2004                01/2005    MM/YYYY   
  Begin**                                                                                       

  Slaughter        45015      45000      47260      45900      0           0          (1000     
  (Reference)                                                                         HEAD)     

  Beginning Stocks 0          0          0          0          0           0          (1000 MT  
                                                                                      CWE)      

  Production       6130       6305       6500       6683       0           7110       (1000 MT  
                                                                                      CWE)      

  Intra EC Imports 0          0          0          0          0           0          (1000 MT  
                                                                                      CWE)      

  Total Imports    29         25         29         10         0           15         (1000 MT  
                                                                                      CWE)      

  TOTAL Imports    29         25         29         10         0           15         (1000 MT  
                                                                                      CWE)      

  TOTAL SUPPLY     6159       6330       6529       6693       0           7125       (1000 MT  
                                                                                      CWE)      

  Intra EC Exports 0          0          0          0          0           0          (1000 MT  
                                                                                      CWE)      

  Total Exports    43         43         45         45         0           50         (1000 MT  
                                                                                      CWE)      

  TOTAL Exports    43         43         45         45         0           50         (1000 MT  
                                                                                      CWE)      

  Human Dom.       6116       6287       6484       6648       0           7075       (1000 MT  
  Consumption                                                                         CWE)      

  Other Use,       0          0          0          0          0           0          (1000 MT  
  Losses                                                                              CWE)      

  TOTAL Dom.       6116       6287       6484       6648       0           7075       (1000 MT  
  Consumption                                                                         CWE)      

  Ending Stocks    0          0          0          0          0           0          (1000 MT  
                                                                                      CWE)      

  TOTAL            6159       6330       6529       6693       0           7125       (1000 MT  
  DISTRIBUTION                                                                        CWE)      

  Calendar Yr.     23         19         0          0          0           0          (1000 MT  
  Imp. from U.S.                                                                      CWE)      

  Calendar Yr.     0          0          0          0          0           0          (1000 MT  
  Exp. to U.S.                                                                        CWE)      
  ---------------- ---------- ---------- ---------- ---------- ----------- ---------- --------- -------

#  

# 

  ------------- ---------- -------------- ---------- ---------- ---------- ---------- ---------- ---------------
  China Import                                                                                   
  Statistics                                                                                     

  UDG: Live                                                                                      
  Cattle, HS                                                                                     
  0102                                                                                           

  Year To Date:                                                                                  
  January -                                                                                      
  June                                                                                           

  **Partner     **Unit**   **Quantity**                         **%                              **% Change**
  Country**                                                     Share**                          

                           **2002**       **2003**   **2004**   **2002**   **2003**   **2004**   **2004/2003**

  World         NO         2,866          18,165     57,848     100        100        100        218.46

  Australia     NO         2,750          15,572     31,316     95.95      85.73      54.13      101.1

  New Zealand   NO         \-             1,560      26,532     0          8.59       45.87      1600.77

  United States NO         116            1,022      \-         4.05       5.63       0          -100

  Canada        NO         \-             11         \-         0          0.06       0          -100
  ------------- ---------- -------------- ---------- ---------- ---------- ---------- ---------- ---------------

  ------------ ----------- ------------ ------------ ---------- ---------- ---------- ---------------
  China Import                                                                        
  Statistics                                                                          

  UDG: Live                                                                           
  Cattle, HS                                                                          
  0102                                                                                

  Year To                                                                             
  Date:                                                                               
  January -                                                                           
  June                                                                                

  **Partner    **United                              **%                              **% Change**
  Country**    States                                Share**                          
               Dollars**                                                              

               **2002**    **2003**     **2004**     **2002**   **2003**   **2004**   **2004/2003**

  World        4,598,335   29,632,188   81,009,250   100        100        100        173.38

  Australia    3,888,835   21,515,348   45,941,169   84.57      72.61      56.71      113.53

  New Zealand  \-          2,080,039    35,068,081   0          7.02       43.29      1585.93

  United       709,500     5,926,801    \-           15.43      20         0          -100
  States                                                                              

  Canada       \-          110,000      \-           0          0.37       0          -100
  ------------ ----------- ------------ ------------ ---------- ---------- ---------- ---------------

  ------------- ---------- -------------- ---------- ---------- ---------- ---------- ---------- ---------------
  China Import                                                                                   
  Statistics                                                                                     

  UDG: Live                                                                                      
  Cattle, HS                                                                                     
  0102                                                                                           

  Calendar                                                                                       
  Year: 2001 -                                                                                   
  2003                                                                                           

  **Partner     **Unit**   **Quantity**                         **%                              **% Change**
  Country**                                                     Share**                          

                           **2001**       **2002**   **2003**   **2001**   **2002**   **2003**   **2003/2002**

  World         NO         2,775          11,432     50,007     100        100        100        337.43

  Australia     NO         2,231          9,280      41,179     80.4       81.18      82.35      343.74

  New Zealand   NO         \-             \-         7,795      0          0          15.59      0

  United States NO         317            256        1,022      11.42      2.24       2.04       299.22

  Canada        NO         227            1,896      11         8.18       16.59      0.02       -99.42
  ------------- ---------- -------------- ---------- ---------- ---------- ---------- ---------- ---------------

  ------------ ----------- ------------ ------------ ---------- ---------- ---------- ---------------
  China Import                                                                        
  Statistics                                                                          

  UDG: Live                                                                           
  Cattle, HS                                                                          
  0102                                                                                

  Calendar                                                                            
  Year: 2001 -                                                                        
  2003                                                                                

  **Partner    **United                              **%                              **% Change**
  Country**    States                                Share**                          
               Dollars**                                                              

               **2001**    **2002**     **2003**     **2001**   **2002**   **2003**   **2003/2002**

  World        5,992,356   22,003,548   71,829,159   100        100        100        226.44

  Australia    3,327,351   12,973,796   56,802,918   55.53      58.96      79.08      337.83

  New Zealand  \-          \-           8,989,440    0          0          12.52      0

  United       1,604,225   1,433,750    5,926,801    26.77      6.52       8.25       313.38
  States                                                                              

  Canada       1,060,780   7,596,002    110,000      17.7       34.52      0.15       -98.55
  ------------ ----------- ------------ ------------ ---------- ---------- ---------- ---------------

  -------------- ---------- -------------- ---------- ---------- ---------- ---------- ---------- ---------------
  China Import                                                                                    
  Statistics                                                                                      

  UDG: Beef and                                                                                   
  Veal,                                                                                           

  Year To Date:                                                                                   
  January - June                                                                                  

  **Partner      **Unit**   **Quantity**                         **%                              **% Change**
  Country**                                                      Share**                          

                            **2002**       **2003**   **2004**   **2002**   **2003**   **2004**   **2004/2003**

  World          T          4,517          5,296      1,655      100        100        100        -68.75

  Australia      T          952            1,281      1,063      21.07      24.2       64.21      -17.08

  Brazil         T          \-             417        422        0          7.88       25.5       1.16

  New Zealand    T          134            76         129        2.98       1.44       7.79       69.48

  United States  T          3,328          3,476      41         73.68      65.64      2.46       -98.83

  China          T          \-             \-         1          0          0.01       0.03       90.73

  Taiwan         T          2              \-         \-         0.04       0          0.01       -25

  Germany        T          \-             \-         \-         0          0          0          0

  Korea South    T          \-             \-         \-         0          0          0          -99.51

  Singapore      T          \-             \-         \-         0          0          0          0

  South Africa   T          1              \-         \-         0.02       0          0          0

  France         T          \-             \-         \-         0          0          0          0

  Canada         T          95             39         \-         2.11       0.74       0          -100

  Thailand       T          4              5          \-         0.09       0.09       0          -100
  -------------- ---------- -------------- ---------- ---------- ---------- ---------- ---------- ---------------

  ------------- ----------- ----------- ----------- ---------- ---------- ---------- ---------------
  China Import                                                                       
  Statistics                                                                         

  UDG: Beef and                                                                      
  Veal,                                                                              

  Year To Date:                                                                      
  January -                                                                          
  June                                                                               

  **Partner     **United                            **%                              **% Change**
  Country**     States                              Share**                          
                Dollars**                                                            

                **2002**    **2003**    **2004**    **2002**   **2003**   **2004**   **2004/2003**

  World         6,814,141   8,340,290   4,666,893   100        100        100        -44.04

  Australia     1,835,075   2,453,897   3,886,056   26.93      29.42      83.27      58.36

  Brazil        \-          514,632     557,678     0          6.17       11.95      8.36

  New Zealand   141,728     97,449      155,207     2.08       1.17       3.33       59.27

  United States 4,717,917   5,194,963   66,744      69.24      62.29      1.43       -98.72

  China         \-          302         864         0          0          0.02       186.09

  Taiwan        3,337       246         241         0.05       0          0.01       -2.03

  Germany       \-          \-          102         0          0          0          0

  Korea South   \-          53          1           0          0          0          -98.11

  Singapore     410         \-          \-          0.01       0          0          0

  South Africa  577         \-          \-          0.01       0          0          0

  France        709         \-          \-          0.01       0          0          0

  Canada        110,271     73,840      \-          1.62       0.89       0          -100

  Thailand      4,117       4,908       \-          0.06       0.06       0          -100
  ------------- ----------- ----------- ----------- ---------- ---------- ---------- ---------------

  -------------- ---------- -------------- ---------- ---------- ---------- ---------- ---------- ---------------
  China Import                                                                                    
  Statistics                                                                                      

  UDG: Beef and                                                                                   
  Veal,                                                                                           

  Calendar Year:                                                                                  
  2001 - 2003                                                                                     

  **Partner      **Unit**   **Quantity**                         **%                              **% Change**
  Country**                                                      Share**                          

                            **2001**       **2002**   **2003**   **2001**   **2002**   **2003**   **2003/2002**

  World          T          4,248          11,488     8,395      100        100        100        -26.92

  United States  T          2,227          8,761      5,533      52.42      76.26      65.91      -36.84

  Australia      T          1,839          2,139      2,231      43.28      18.62      26.58      4.3

  Brazil         T          \-             24         467        0          0.21       5.57       1844.61

  New Zealand    T          117            210        112        2.74       1.83       1.33       -46.75

  Canada         T          26             343        39         0.6        2.99       0.47       -88.56

  Thailand       T          5              7          6          0.12       0.06       0.07       -20.36

  Taiwan         T          \-             2          5          0.01       0.02       0.06       193.94

  Korea South    T          1              \-         1          0.03       0          0.01       375

  China          T          1              \-         \-         0.01       0          0          0

  Japan          T          33             \-         \-         0.78       0          0          0

  Argentina      T          \-             \-         \-         0          0          0          0

  Colombia       T          \-             \-         \-         0          0          0          0

  France         T          \-             \-         \-         0          0          0          -100

  Germany        T          \-             \-         \-         0          0          0          -100

  Singapore      T          \-             \-         \-         0          0          0          -100

  South Africa   T          \-             1          \-         0          0.01       0          -100

  Switzerland    T          \-             \-         \-         0          0          0          0
  -------------- ---------- -------------- ---------- ---------- ---------- ---------- ---------- ---------------

  ------------- ----------- ------------ ------------ ---------- ---------- ---------- ---------------
  China Import                                                                         
  Statistics                                                                           

  UDG: Beef and                                                                        
  Veal,                                                                                

  Calendar                                                                             
  Year: 2001 -                                                                         
  2003                                                                                 

  **Partner     **United                              **%                              **% Change**
  Country**     States                                Share**                          
                Dollars**                                                              

                **2001**    **2002**     **2003**     **2001**   **2002**   **2003**   **2003/2002**

  World         9,005,201   17,174,011   15,493,722   100        100        100        -9.78

  United States 5,507,516   13,045,203   9,971,228    61.16      75.96      64.36      -23.56

  Australia     3,176,350   3,496,550    4,713,513    35.27      20.36      30.42      34.8

  Brazil        \-          49,416       573,574      0          0.29       3.7        1060.71

  New Zealand   146,927     201,554      134,762      1.63       1.17       0.87       -33.14

  Canada        53,011      368,468      73,840       0.59       2.15       0.48       -79.96

  Taiwan        518         3,337        20,092       0.01       0.02       0.13       502.1

  Thailand      5,440       7,157        6,108        0.06       0.04       0.04       -14.66

  China         426         \-           302          0          0          0          0

  Korea South   1,134       605          241          0.01       0          0          -60.17

  Japan         111,205     \-           62           1.23       0          0          0

  Argentina     254         \-           \-           0          0          0          0

  Colombia      244         \-           \-           0          0          0          0

  France        \-          709          \-           0          0          0          -100

  Germany       \-          25           \-           0          0          0          -100

  Singapore     114         410          \-           0          0          0          -100

  South Africa  \-          577          \-           0          0          0          -100

  Switzerland   2,062       \-           \-           0.02       0          0          0
  ------------- ----------- ------------ ------------ ---------- ---------- ---------- ---------------

  ------------- ---------- -------------- ---------- ---------- ---------- ---------- ---------- ---------------
  China Export                                                                                   
  Statistics                                                                                     

  UDG: Live                                                                                      
  Cattle, HS                                                                                     
  0102                                                                                           

  Year To Date:                                                                                  
  January -                                                                                      
  June                                                                                           

  **Partner     **Unit**   **Quantity**                         **%                              **% Change**
  Country**                                                     Share**                          

                           **2002**       **2003**   **2004**   **2002**   **2003**   **2004**   **2004/2003**

  World         NO         27,327         23,849     25,074     100        100        100        5.14

  Hong Kong     NO         23,591         21,310     22,385     86.33      89.35      89.28      5.04

  Macau         NO         2,618          2,529      2,689      9.58       10.6       10.72      6.33

  Malaysia      NO         1,033          \-         \-         3.78       0          0          0

  Myanmar       NO         85             \-         \-         0.31       0          0          0

  Korea North   NO         \-             10         \-         0          0.04       0          -100
  ------------- ---------- -------------- ---------- ---------- ---------- ---------- ---------- ---------------

  ------------- ---------- -------------- ---------- ---------- ---------- ---------- ---------- ---------------
  China Export                                                                                   
  Statistics                                                                                     

  UDG: Live                                                                                      
  Cattle, HS                                                                                     
  0102                                                                                           

  Year To Date:                                                                                  
  January -                                                                                      
  June                                                                                           

  **Partner     **Unit**   **Quantity**                         **%                              **% Change**
  Country**                                                     Share**                          

                           **2002**       **2003**   **2004**   **2002**   **2003**   **2004**   **2004/2003**

  World         NO         27,327         23,849     25,074     100        100        100        5.14

  Hong Kong     NO         23,591         21,310     22,385     86.33      89.35      89.28      5.04

  Macau         NO         2,618          2,529      2,689      9.58       10.6       10.72      6.33

  Malaysia      NO         1,033          \-         \-         3.78       0          0          0

  Myanmar       NO         85             \-         \-         0.31       0          0          0

  Korea North   NO         \-             10         \-         0          0.04       0          -100
  ------------- ---------- -------------- ---------- ---------- ---------- ---------- ---------- ---------------

  ------------- ---------- -------------- ---------- ---------- ---------- ---------- ---------- ---------------
  China Export                                                                                   
  Statistics                                                                                     

  UDG: Live                                                                                      
  Cattle, HS                                                                                     
  0102                                                                                           

  Calendar                                                                                       
  Year: 2001 -                                                                                   
  2003                                                                                           

  **Partner     **Unit**   **Quantity**                         **%                              **% Change**
  Country**                                                     Share**                          

                           **2001**       **2002**   **2003**   **2001**   **2002**   **2003**   **2003/2002**

  World         NO         57,171         58,280     50,645     100        100        100        -13.1

  Hong Kong     NO         50,674         49,163     44,929     88.64      84.36      88.71      -8.61

  Macau         NO         5,174          5,335      5,169      9.05       9.15       10.21      -3.11

  Korea North   NO         1,323          17         449        2.31       0.03       0.89       2541.18

  Thailand      NO         \-             \-         98         0          0          0.19       0

  Malaysia      NO         \-             3,091      \-         0          5.3        0          -100

  Myanmar       NO         \-             674        \-         0          1.16       0          -100
  ------------- ---------- -------------- ---------- ---------- ---------- ---------- ---------- ---------------

  ------------ ------------ ------------ ------------ ---------- ---------- ---------- ---------------
  China Export                                                                         
  Statistics                                                                           

  UDG: Live                                                                            
  Cattle, HS                                                                           
  0102                                                                                 

  Calendar                                                                             
  Year: 2001 -                                                                         
  2003                                                                                 

  **Partner    **United                               **%                              **% Change**
  Country**    States                                 Share**                          
               Dollars**                                                               

               **2001**     **2002**     **2003**     **2001**   **2002**   **2003**   **2003/2002**

  World        33,748,546   33,107,066   30,670,522   100        100        100        -7.36

  Hong Kong    31,047,108   29,888,156   28,068,967   92         90.28      91.52      -6.09

  Macau        2,480,665    2,582,640    2,473,216    7.35       7.8        8.06       -4.24

  Korea North  220,773      1,720        84,809       0.65       0.01       0.28       4830.76

  Thailand     \-           \-           43,530       0          0          0.14       0

  Malaysia     \-           455,800      \-           0          1.38       0          -100

  Myanmar      \-           178,750      \-           0          0.54       0          -100
  ------------ ------------ ------------ ------------ ---------- ---------- ---------- ---------------

  --------------------- ---------- -------------- ---------- ---------- ---------- ---------- ---------- ---------------
  China Export                                                                                           
  Statistics                                                                                             

  UDG: Beef and Veal,                                                                                    

  Year To Date:                                                                                          
  January - June                                                                                         

  **Partner Country**   **Unit**   **Quantity**                         **%                              **% Change**
                                                                        Share**                          

                                   **2002**       **2003**   **2004**   **2002**   **2003**   **2004**   **2004/2003**

  World                 T          11,762         10,755     14,180     100        100        100        31.85

  Hong Kong             T          7,124          6,738      7,914      60.57      62.65      55.81      17.44

  Japan                 T          711            1,736      2,444      6.05       16.14      17.24      40.78

  Korea South           T          714            759        999        6.07       7.05       7.05       31.72

  Malaysia              T          413            474        623        3.51       4.41       4.39       31.31

  Russia                T          982            270        550        8.35       2.51       3.88       103.7

  Kuwait                T          354            54         475        3.01       0.5        3.35       776.46

  Indonesia             T          393            345        368        3.34       3.21       2.59       6.62

  United Arab Emirates  T          313            181        348        2.66       1.68       2.45       92.35

  Singapore             T          36             55         76         0.31       0.51       0.54       38.8
  --------------------- ---------- -------------- ---------- ---------- ---------- ---------- ---------- ---------------

  --------------------- ------------ ------------ ------------ ---------- ---------- ---------- ---------------
  China Export                                                                                  
  Statistics                                                                                    

  UDG: Beef and Veal,                                                                           

  Year To Date:                                                                                 
  January - June                                                                                

  **Partner Country**   **United                               **%                              **% Change**
                        States                                 Share**                          
                        Dollars**                                                               

                        **2002**     **2003**     **2004**     **2002**   **2003**   **2004**   **2004/2003**

  World                 19,686,723   22,015,849   31,697,558   100        100        100        43.98

  Hong Kong             10,712,827   11,169,729   13,083,600   54.42      50.73      41.28      17.13

  Japan                 3,159,471    7,390,102    12,157,145   16.05      33.57      38.35      64.51

  Korea South           1,005,157    1,087,483    1,492,864    5.11       4.94       4.71       37.28

  Kuwait                709,024      122,635      1,112,704    3.6        0.56       3.51       807.33

  Russia                1,198,750    406,477      1,024,198    6.09       1.85       3.23       151.97

  United Arab Emirates  709,849      419,636      848,060      3.61       1.91       2.68       102.09

  Malaysia              553,342      615,618      764,237      2.81       2.8        2.41       24.14

  Indonesia             551,238      447,298      458,705      2.8        2.03       1.45       2.55

  Singapore             59,680       92,840       148,260      0.3        0.42       0.47       59.69
  --------------------- ------------ ------------ ------------ ---------- ---------- ---------- ---------------

  ---------------- ---------- -------------- ---------- ---------- ---------- ---------- ---------- ---------------
  China Export                                                                                      
  Statistics                                                                                        

  UDG: Beef and                                                                                     
  Veal,                                                                                             

  Calendar Year:                                                                                    
  2001 - 2003                                                                                       

  **Partner        **Unit**   **Quantity**                         **%                              **% Change**
  Country**                                                        Share**                          

                              **2001**       **2002**   **2003**   **2001**   **2002**   **2003**   **2003/2002**

  World            T          37,884         26,764     25,797     100        100        100        -3.61

  Hong Kong        T          16,716         14,390     14,014     44.12      53.77      54.32      -2.61

  Japan            T          5,510          3,768      5,385      14.54      14.08      20.87      42.91

  Korea South      T          1,777          1,903      1,704      4.69       7.11       6.61       -10.45

  Russia           T          1,658          1,812      1,169      4.38       6.77       4.53       -35.48

  Indonesia        T          728            947        1,098      1.92       3.54       4.26       15.9

  Malaysia         T          1,021          1,154      1,014      2.7        4.31       3.93       -12.07

  United Arab      T          310            632        509        0.82       2.36       1.97       -19.48
  Emirates                                                                                          

  Kuwait           T          767            509        363        2.03       1.9        1.41       -28.57

  Korea North      T          456            196        105        1.2        0.73       0.41       -46.26

  Singapore        T          134            135        105        0.35       0.5        0.41       -21.81

  Macau            T          171            71         79         0.45       0.26       0.31       11.28
  ---------------- ---------- -------------- ---------- ---------- ---------- ---------- ---------- ---------------

  --------------- ------------ ------------ ------------ ---------- ---------- ---------- ---------------
  China Export                                                                            
  Statistics                                                                              

  UDG: Beef and                                                                           
  Veal,                                                                                   

  Calendar Year:                                                                          
  2001 - 2003                                                                             

  **Partner       **United                               **%                              **% Change**
  Country**       States                                 Share**                          
                  Dollars**                                                               

                  **2001**     **2002**     **2003**     **2001**   **2002**   **2003**   **2003/2002**

  World           73,177,992   50,489,342   55,762,820   100        100        100        10.44

  Japan           24,598,734   14,876,547   23,253,237   33.61      29.46      41.7       56.31

  Hong Kong       24,404,249   22,500,139   22,542,507   33.35      44.56      40.43      0.19

  Korea South     2,498,552    2,726,108    2,467,781    3.41       5.4        4.43       -9.48

  Russia          1,459,322    2,344,399    1,852,899    1.99       4.64       3.32       -20.96

  Indonesia       1,015,584    1,330,681    1,393,646    1.39       2.64       2.5        4.73

  Malaysia        1,399,400    1,601,405    1,299,806    1.91       3.17       2.33       -18.83

  United Arab     628,413      1,450,125    1,226,667    0.86       2.87       2.2        -15.41
  Emirates                                                                                

  Kuwait          1,564,994    1,058,208    827,644      2.14       2.1        1.48       -21.79

  Korea North     512,089      319,513      199,306      0.7        0.63       0.36       -37.62

  Singapore       223,274      219,729      177,603      0.31       0.44       0.32       -19.17

  Macau           332,163      139,468      172,321      0.45       0.28       0.31       23.56
  --------------- ------------ ------------ ------------ ---------- ---------- ---------- ---------------

#  

  ---------------- -------- -------- -------- ----------------------------
  CHINA\'S RETAIL                             
  BEEF PRICES ON                              
  AVERAGE                                     

  (RMB/KG, USD                                
  1=8.27)                                     

                   2002     2003     2004     \% Change 2004/03

  January          14.00    15.26    16.35    7.14%

  February         14.00    15.29    16.18    5.82%

  March            14.21    15.03    16.24    8.05%

  April            13.72    15.02    16.28    8.39%

  May              13.91    15.91    16.32    2.58%

  June             13.96    15.08    16.36    8.49%

  July             13.94    15.04    16.36    8.78%

  August           14.16    15.07             

  September        14.25    15.26             

  October          14.29    15.43             

  November         14.70    15.87             

  December         14.77    15.97             

  Source: The                                 
  Ministry of                                 
  Agriculture                                 
  ---------------- -------- -------- -------- ----------------------------

# Swine and Pork 

## Swine and pork production increases due to strong demand and poultry meat safety concerns

China\'s swine and pork production in 2005 and the second half of 2004
are forecast up, a reversal of the downward trend for pork\'s share of
total meat production.  The producers\' motivation is mainly due
to higher swine and pork profit and because of consumers switching to
pork consumption due to the HPAI outbreak in China during January to
March 2004.  

MOA reported that during the first 6 months of 2004, the conversion
ratio of swine and grain was 1:6.60, higher than the current profit and
loss point of 1:5.50.  As a result of Chinese farmers responding to
these higher prices, post forecasts the pace of growth for swine and
pork in 2004 may continue into 2005.    

China\'s beginning year stock of swine in 2005 is forecast to increase
to 470 million head, nearly one percent up from the previous year. End
of year swine inventory in 2005 is forecast up to 479 million head, an
increase of nearly 2 percent.  The sow ratio is 9.5 percent on average,
a 1.8 percent increase over the same period of the previous year. The
sow ratio in Hunan and Sichuan increased 4 percent, while in Hebei the
increase was 8 percent.  The rational swine ratio in China is roughly 8
percent.  The increased swine crop will lead to larger consumption of
corn and soybean meal.  This increased demand for corn and soybeans may
translate into increased imports in 2004 and 2005. The National
Statistics Bureau (NSB) has never announced sow numbers. However, after
double check with MOA's information, post advised the sow number for
2003 up to 44.5 million head, and estimated the numbers for 2004 and
2005 accordingly.

Pork production for 2005 is forecast at 49 MMT, a 4 percent increase
from the 47 MMT in 2004.  According to the industry, pork production in
the first 6 months 2004 accounted for 70 percent of the increase
from the previous year.  However, the pace of growth will not likely
continue next year and will definitely not increase to the 10 percent
levels of the 1990s.  The government policy is to stabilize grain-fed
animal production and reduce grain demand.

According to NSB, the large pork producing provinces are Sichuan, Hunan,
Henan, Shandong Hebei, Anhui and Yunnan, accounting for over 50 percent
of total pork production. About 80 percent swine are still raised by
farmers in their backyards.   

## Hormones are not allowed in feeds; swine demand fuels feed use 

According to China\'s feed law, hormones are not allowed for any kind of
feeds.  Nutrients, minerals or medical additives are permitted. 

From January to June 2004, feed production was 36.77 MMT, an 11 percent
decrease over the same period of 2003.  Of total feed, compound feed
comprised 28.24 MMT, down 8 percent. Concentrated feed was 7.45 MMT,
down 20 percent, and pre-mixed feed was 1.08 MMT, down 25
percent.  However, swine compound feed was at 10.63 MMT, up 8 percent.
Swine concentrated feed was 4.1 MMT, down 12 percent.  Swine pre-mixed
feed with additives was 590,000 MT, down 15 percent.  In the first six
months of 2004, prices for corn, soy meal, fishmeal and lysine were all
higher over the same period of 2003.  Soya meal is entirely imported.
This trend will continue in the next couple of years, since soybean
production will not meet demand.  

**Lots of attention on food safety policies**

China\'s media increasingly exposes food poisoning cases
including chemical residues in meat. Faced with frustrations gaining
access to export markets, coupled with domestic awareness of food
safety, government agencies check domestic meat products more regularly
and publish the names of low quality processors in newspapers.

MOA has just completed the last animal-disease-free zone on Hainan
Island, the last of the five zones initiated in 2001. These zones are
all located in areas geographically favorable for epidemic control. The
other four are located at Jiaodong Peninsula, Liaodong Peninsula,
Sichuan Basin and Chongqing Municipality.  These zones focus on
systematic animal disease control, supervision, monitoring and
prevention, serving as animal production models for China.  Now these
zones are attracting domestic investment from flagship meat processing
plants.  In a long run, this project will help improve China\'s meat
quality and export competitiveness.

Among red meat animals, only swine slaughter has an official regulation
that slaughter be done at slaughtering houses designated by the
Government at or at provincial levels.  However, many smaller plants
remain registered, malpractice continues and poor quality pork is often
found in markets, according to industry sources.  In response, MOFCOM is
preparing to revise the slaughter regulation by the end of this year to
address the problems and improve pork quality.

China will introduce a food safety bar code system for 61-flagship meat
packing firms effective on September 1, 2004.  Companies under this
pilot scheme must display on their products a bar code of 20 digits
aimed to guarantee product quality.  This scheme is designed
to establish a national compulsory food safety system for the meat
packing industry. However, this effort could also lead to the bankruptcy
of small, lower quality packers.  

Jiangsu Province already closed 360 illegal hog slaughter plants.
Beijing has decided to close all legal swine slaughtering houses in
urban districts by the end of this year and move them to the suburbs.
 The government also requires, as of June 2004, that all fresh meat must
be transported to Beijing in refrigerated trucks.  

China announced the Regulation on Animal Drug Administration on April 9,
2004 to address malpractice of animal drug usage.  In another relevant
regulation, animal drug plants must reregister before they are approved
to produce animal drugs.  The unqualified will be shut down.

## Consumption 

Pork consumption for 2005 is forecast to grow 4 percent from 46.9
percent to 48.9 percent.  According to the industry, the pork production
share is 70 percent of total meat.  Higher potential pork consumption
lies in the rural area.  MOFCOM recently announced a new policy to
encourage domestic and foreign companies to develop markets of farm
produce, chain stores and super markets in rural areas.  This will
translate into more convenient access to meat.

## Average prices up 8 percent for swine, 11 percent for piglet and 13 percent for pork from January to July Marketing Subcategory 

Average swine prices in the first seven months went up over 8 percent,
pork prices up 13 percent and piglet prices up 11 percent, an increase
of 39 percent, 29 percent and 27 percent respectively over the same
period of 2003.  The price is higher than post\'s previous forecast.
 The reasons for the price increase are mainly due to the demand
increase after HPAI outbreaks, production cost increase due to overall
grain and feed prices increasing and the impact of higher international
pork prices. Since poultry production is still fragile and pork
production is enthusiastic, prices may remain high at least through the
rest of the year and potentially into the first quarter of next year
when high consuming periods begin.  

## New import quarantine regulation concern 

On May 9, 2004 China State General Administration for Quality
Supervision, Inspection and Quarantine (AQSIQ) announced this new
regulation effective on November 1, 2004 (please see our Gain
report CH4032).  The regulation requires that inner labeling be included
for both the establishment number of product name.  

The US faces competition from other meat exporting countries. Some
countries have requested that China accept their meat export equivalency
system, like China accepted the US system.  AQSIQ has already started an
equivalency evaluation with Brazil.  If China approves the Brazilian
health system, Brazilian meat could enter China\'s retail sector.  With
cheaper labor cost, Brazil would become a potential competitor for the
US.

China\'s pork imports for 2004 are estimated to decrease 20 percent from
155,000 MT to 122,000 MT, and imports for 2005 are forecast to remain
flat due to higher international prices and increased domestic
production.  The US, Denmark and Canada are dominant suppliers.  The top
five Chinese importers are Guangdong, Henan, Shanghai, Jiangsu and
Guangxi.  During the HPAI period, more than 40 countries suspended
poultry imports from China.  The bans led to a slow down of government
approval for import quarantine permits. Many traders complained that
they waited for a much longer time to get a feedback.  Higher
international pork prices have also constrained imports.  

China\'s pork exports for 2005 are forecast to increase 33 percent from
370,000 MT to 440,000 MT due to increased demand of Hong Kong, Japan and
South Korea.  China\'s pork exports to Russia are limited by an import
quota limit.  However, increased exports to the other three export
markets have made up the losses.  The top five exporting provinces are
Shandong, Sichuan, Heilongjiang, Henan and Hunan.  Their exports
accounted for over 90 percent of total pork exports.  Except Henan
province, all the other four increased exports from January to June
2004.  

  ---------------- ---------- ---------- ---------- ---------- ---------- ---------- --------- -------
  **PSD Table**                                                                                

  **Country**      **China,                                                                    
                   Peoples                                                                     
                   Republic                                                                    
                   of**                                                                        

  **Commodity**    **Animal                                    (1000                           
                   Numbers,                                    HEAD)                           
                   Swine**                                                                     

                   2003       Revised    2004       Estimate   2005       Forecast   UOM       

                   USDA       Post       USDA       Post       USDA       Post                 
                   Official   Estimate   Official   Estimate   Official   Estimate             
                   \[Old\]    \[New\]    \[Old\]    \[New\]    \[Old\]    \[New\]              

  **Market Year               01/2003               01/2004               01/2005    MM/YYYY   
  Begin**                                                                                      

  TOTAL Beginning  462915     462915     467327     466017     470410     470410     (1000     
  Stocks                                                                             HEAD)     

  Sow Beginning    37800      44550      38367      45350      0          45800      (1000     
  Stocks                                                                             HEAD)     

  Production (Pig  575300     597814     580000     608500     0          619480     (1000     
  Crop)                                                                              HEAD)     

  Intra EC Imports 0          0          0          0          0          0          (1000     
                                                                                     HEAD)     

  Total Imports    2          2          2          2          0          2          (1000     
                                                                                     HEAD)     

  TOTAL Imports    2          2          2          2          0          2          (1000     
                                                                                     HEAD)     

  TOTAL SUPPLY     1038217    1060731    1047329    1074519    470410     1089892    (1000     
                                                                                     HEAD)     

  Intra EC Exports 0          0          0          0          0          0          (1000     
                                                                                     HEAD)     

  Total Exports    1887       1887       1886       1800       0          1800       (1000     
                                                                                     HEAD)     

  TOTAL Exports    1887       1887       1886       1800       0          1800       (1000     
                                                                                     HEAD)     

  Sow Slaughter    0          0          0          0          0          0          (1000     
                                                                                     HEAD)     

  OTHER SLAUGHTER  568003     592005     574033     601395     0          609215     (1000     
                                                                                     HEAD)     

  Total Slaughter  568003     592005     574033     601395     0          609215     (1000     
                                                                                     HEAD)     

  Loss             1000       1000       1000       914        0          0          (1000     
                                                                                     HEAD)     

  Ending           467327     466017     470410     470410     0          478877     (1000     
  Inventories                                                                        HEAD)     

  TOTAL            1038217    1060909    1047329    1074519    0          1089892    (1000     
  DISTRIBUTION                                                                       HEAD)     

  Calendar Yr.     0          0          0          0          0          0          (1000     
  Imp. from U.S.                                                                     HEAD)     

  Calendar Yr.     0          0          0          0          0          0          (1000     
  Exp. to U.S.                                                                       HEAD)     
  ---------------- ---------- ---------- ---------- ---------- ---------- ---------- --------- -------

  ---------------- ---------- ---------- ---------- ---------- ----------- ---------- --------- -------
  **PSD Table**                                                                                 

  **Country**      **China,                                                                     
                   Peoples                                                                      
                   Republic                                                                     
                   of**                                                                         

  **Commodity**    **Meat,                                     (1000 MT                         
                   Swine**                                     CWE)(1000                        
                                                               HEAD)                            

                   2003       Revised    2004       Estimate   2005        Forecast   UOM       

                   USDA       Post       USDA       Post       USDA        Post                 
                   Official   Estimate   Official   Estimate   Official    Estimate             
                   \[Old\]    \[New\]    \[Old\]    \[New\]    \[Old\]     \[New\]              

  **Market Year               01/2003               01/2004                01/2005    MM/YYYY   
  Begin**                                                                                       

  Slaughter        568003     567466     574033     574693     0           0          (1000     
  (Reference)                                                                         HEAD)     

  Beginning Stocks 0          0          0          0          0           0          (1000 MT  
                                                                                      CWE)      

  Production       44600      45186      45940      47170      0           49293      (1000 MT  
                                                                                      CWE)      

  Intra EC Imports 0          0          0          0          0           0          (1000 MT  
                                                                                      CWE)      

  Total Imports    149        149        155        122        0           122        (1000 MT  
                                                                                      CWE)      

  TOTAL Imports    149        149        155        122        0           122        (1000 MT  
                                                                                      CWE)      

  TOTAL SUPPLY     44749      45335      46095      47292      0           49415      (1000 MT  
                                                                                      CWE)      

  Intra EC Exports 0          0          0          0          0           0          (1000 MT  
                                                                                      CWE)      

  Total Exports    282        282        370        330        0           440        (1000 MT  
                                                                                      CWE)      

  TOTAL Exports    282        282        370        330        0           440        (1000 MT  
                                                                                      CWE)      

  Human Dom.       44467      45053      45725      46962      0           48975      (1000 MT  
  Consumption                                                                         CWE)      

  Other Use,       0          0          0          0          0           0          (1000 MT  
  Losses                                                                              CWE)      

  TOTAL Dom.       44467      45053      45725      46962      0           48975      (1000 MT  
  Consumption                                                                         CWE)      

  Ending Stocks    0          0          0          0          0           0          (1000 MT  
                                                                                      CWE)      

  TOTAL            44749      45335      46095      47292      0           49415      (1000 MT  
  DISTRIBUTION                                                                        CWE)      

  Calendar Yr.     78         78         81         45         0           45         (1000 MT  
  Imp. from U.S.                                                                      CWE)      

  Calendar Yr.     0          0          0          0          0           0          (1000 MT  
  Exp. to U.S.                                                                        CWE)      
  ---------------- ---------- ---------- ---------- ---------- ----------- ---------- --------- -------

  -------------- ---------- -------------- ---------- ---------- ---------- ---------- ---------- ---------------
  China Import                                                                                    
  Statistics                                                                                      

  UDG: Swine,                                                                                     

  Year To Date:                                                                                   
  January - June                                                                                  

  **Partner      **Unit**   **Quantity**                         **%                              **% Change**
  Country**                                                      Share**                          

                            **2002**       **2003**   **2004**   **2002**   **2003**   **2004**   **2004/2003**

  World          NO         601            772        870        100        100        100        12.69

  Canada         NO         \-             500        480        \-         64.77      55.17      -4

  United States  NO         \-             \-         390        \-         0          44.83      0

  Denmark        NO         313            272        \-         52         35.23      0          -100

  France         NO         288            \-         \-         48         0          0          0
  -------------- ---------- -------------- ---------- ---------- ---------- ---------- ---------- ---------------

  -------------- ----------- ---------- ----------- ---------- ---------- ---------- ---------------
  China Import                                                                       
  Statistics                                                                         

  UDG: Swine,                                                                        

  Year To Date:                                                                      
  January - June                                                                     

  **Partner      **United                           **%                              **% Change**
  Country**      States                             Share**                          
                 Dollars**                                                           

                 **2002**    **2003**   **2004**    **2002**   **2003**   **2004**   **2004/2003**

  World          917,878     864,340    1,096,696   100        100        100        26.88

  Canada         \-          468,500    656,800     0          54.2       59.89      40.19

  United States  \-          \-         439,896     0          0          40.11      0

  Denmark        503,875     395,840    \-          54.9       45.8       0          -100

  France         414,003     \-         \-          45.1       0          0          0
  -------------- ----------- ---------- ----------- ---------- ---------- ---------- ---------------

  -------------- ---------- -------------- ---------- ---------- ---------- ---------- ---------- ---------------
  China Import                                                                                    
  Statistics                                                                                      

  UDG: Swine,                                                                                     

  Calendar Year:                                                                                  
  2001 - 2003                                                                                     

  **Partner      **Unit**   **Quantity**                         **%                              **% Change**
  Country**                                                      Share**                          

                            **2001**       **2002**   **2003**   **2001**   **2002**   **2003**   **2003/2002**

  World          NO         1,256          1,163      1,797      100        100        100        54.51

  Canada         NO         164            \-         1,083      13.06      0          60.27      0

  United States  NO         461            231        442        36.7       19.86      24.6       91.34

  Denmark        NO         490            644        272        39.01      55.37      15.14      -57.76

  France         NO         \-             288        \-         0          24.76      0          -100

  Sweden         NO         141            \-         \-         11.23      0          0          0
  -------------- ---------- -------------- ---------- ---------- ---------- ---------- ---------- ---------------

  ------------- ----------- ----------- ----------- ---------- ---------- ---------- ---------------
  China Import                                                                       
  Statistics                                                                         

  UDG: Swine,                                                                        

  Calendar                                                                           
  Year: 2001 -                                                                       
  2003                                                                               

  **Partner     **United                            **%                              **% Change**
  Country**     States                              Share**                          
                Dollars**                                                            

                **2001**    **2002**    **2003**    **2001**   **2002**   **2003**   **2003/2002**

  World         1,919,529   2,010,566   1,998,990   100        100        100        -0.58

  Canada        300,903     \-          1,085,900   15.68      0          54.32      0

  United States 609,566     499,535     517,250     31.76      24.85      25.88      3.55

  Denmark       768,679     1,097,028   395,840     40.05      54.56      19.8       -63.92

  France        \-          414,003     \-          0          20.59      0          -100

  Sweden        240,381     \-          \-          12.52      0          0          0
  ------------- ----------- ----------- ----------- ---------- ---------- ---------- ---------------

  ------------- ---------- -------------- ---------- ---------- ---------- ---------- ---------- ---------------
  China Import                                                                                   
  Statistics                                                                                     

  UDG: Pork,                                                                                     

  Year To Date:                                                                                  
  January -                                                                                      
  June                                                                                           

  **Partner     **Unit**   **Quantity**                         **%                              **% Change**
  Country**                                                     Share**                          

                           **2002**       **2003**   **2004**   **2002**   **2003**   **2004**   **2004/2003**

  World         T          71,982         50,625     43,964     100        100        100        -13.16

  United States T          56,110         24,449     20,616     77.95      48.29      46.89      -15.68

  Denmark       T          123            12,510     12,702     0.17       24.71      28.89      1.53

  Canada        T          15,637         13,635     10,607     21.72      26.93      24.13      -22.21

  Brazil        T          \-             \-         23         0          0          0.05       0
  ------------- ---------- -------------- ---------- ---------- ---------- ---------- ---------- ---------------

  ------------ ------------ ------------ ------------ ---------- ---------- ---------- ---------------
  China Import                                                                         
  Statistics                                                                           

  UDG: Pork,                                                                           

  Year To                                                                              
  Date:                                                                                
  January -                                                                            
  June                                                                                 

  **Partner    **United                               **%                              **% Change**
  Country**    States                                 Share**                          
               Dollars**                                                               

               **2002**     **2003**     **2004**     **2002**   **2003**   **2004**   **2004/2003**

  World        39,463,891   32,302,497   31,199,827   100        100        100        -3.41

  United       30,897,681   15,476,239   14,634,469   78.29      47.91      46.91      -5.44
  States                                                                               

  Denmark      90,301       7,448,032    8,432,061    0.23       23.06      27.03      13.21

  Canada       8,387,235    9,309,593    8,102,169    21.25      28.82      25.97      -12.97

  Brazil       \-           \-           12,681       0          0          0.04       0
  ------------ ------------ ------------ ------------ ---------- ---------- ---------- ---------------

  ------------- ---------- -------------- ---------- ---------- ---------- ---------- ---------- ---------------
  China Import                                                                                   
  Statistics                                                                                     

  UDG: Pork,                                                                                     

  Calendar                                                                                       
  Year: 2001 -                                                                                   
  2003                                                                                           

  **Partner     **Unit**   **Quantity**                         **%                              **% Change**
  Country**                                                     Share**                          

                           **2001**       **2002**   **2003**   **2001**   **2002**   **2003**   **2003/2002**

  World         T          94,357         144,979    149,117    100        100        100        2.85

  United States T          39,560         108,220    77,642     41.93      74.65      52.07      -28.26

  Denmark       T          17,733         1,471      37,505     18.79      1.01       25.15      2449.27

  Canada        T          22,249         35,002     33,897     23.58      24.14      22.73      -3.16
  ------------- ---------- -------------- ---------- ---------- ---------- ---------- ---------- ---------------

  ------------ ------------ ------------ ------------ ---------- ---------- ---------- ---------------
  China Import                                                                         
  Statistics                                                                           

  UDG: Pork,                                                                           

  Calendar                                                                             
  Year: 2001 -                                                                         
  2003                                                                                 

  **Partner    **United                               **%                              **% Change**
  Country**    States                                 Share**                          
               Dollars**                                                               

               **2001**     **2002**     **2003**     **2001**   **2002**   **2003**   **2003/2002**

  World        41,906,470   81,520,644   90,779,875   100        100        100        11.36

  United       17,593,881   60,904,340   45,548,760   41.98      74.71      50.17      -25.21
  States                                                                               

  Denmark      7,747,599    1,001,682    22,861,293   18.49      1.23       25.18      2182.29

  Canada       10,258,463   19,395,184   22,229,906   24.48      23.79      24.49      14.62
  ------------ ------------ ------------ ------------ ---------- ---------- ---------- ---------------

  ------------- ---------- -------------- ---------- ---------- ---------- ---------- ---------- ---------------
  China Export                                                                                   
  Statistics                                                                                     

  UDG: Swine,                                                                                    

  Year To Date:                                                                                  
  January -                                                                                      
  June                                                                                           

  **Partner     **Unit**   **Quantity**                         **%                              **% Change**
  Country**                                                     Share**                          

                           **2002**       **2003**   **2004**   **2002**   **2003**   **2004**   **2004/2003**

  World         NO         923,973        921,550    940,612    100        100        100        2.07

  Hong Kong     NO         861,950        861,766    879,056    93.29      93.51      93.46      2.01

  Macau         NO         61,071         59,457     61,451     6.61       6.45       6.53       3.35

  Korea North   NO         337            \-         55         0.04       0          0.01       0

  Myanmar       NO         615            327        50         0.07       0.04       0.01       -84.71
  ------------- ---------- -------------- ---------- ---------- ---------- ---------- ---------- ---------------

  ------------ ------------- ------------- ------------- ---------- ---------- ---------- ---------------
  China Export                                                                            
  Statistics                                                                              

  UDG: Swine,                                                                             

  Year To                                                                                 
  Date:                                                                                   
  January -                                                                               
  June                                                                                    

  **Partner    **United                                  **%                              **% Change**
  Country**    States                                    Share**                          
               Dollars**                                                                  

               **2002**      **2003**      **2004**      **2002**   **2003**   **2004**   **2004/2003**

  World        106,797,187   104,555,054   110,792,508   100        100        100        5.97

  Hong Kong    98,065,241    96,078,600    102,321,221   91.82      91.89      92.35      6.5

  Macau        8,685,596     8,460,653     8,465,504     8.13       8.09       7.64       0.06

  Korea North  19,335        \-            3,850         0.02       0          0          0

  Myanmar      27,015        15,801        1,933         0.03       0.02       0          -87.77
  ------------ ------------- ------------- ------------- ---------- ---------- ---------- ---------------

  ------------ ---------- -------------- ----------- ----------- ---------- ---------- ---------- ---------------
  China Export                                                                                    
  Statistics                                                                                      

  UDG: Swine,                                                                                     

  Calendar                                                                                        
  Year: 2001 -                                                                                    
  2003                                                                                            

  **Partner    **Unit**   **Quantity**                           **%                              **% Change**
  Country**                                                      Share**                          

                          **2001**       **2002**    **2003**    **2001**   **2002**   **2003**   **2003/2002**

  World        NO         1,972,595      1,888,606   1,887,295   100        100        100        -0.07

  Hong Kong    NO         1,837,537      1,766,326   1,764,935   93.15      93.53      93.52      -0.08

  Macau        NO         133,097        120,489     121,600     6.75       6.38       6.44       0.92

  Myanmar      NO         1,866          833         681         0.09       0.04       0.04       -18.25

  Korea North  NO         65             958         55          0          0.05       0          -94.26

  Kyrgyzstan   NO         \-             \-          20          0          0          0          0

  Mongolia     NO         30             \-          4           0          0          0          0
  ------------ ---------- -------------- ----------- ----------- ---------- ---------- ---------- ---------------

  ------------ ------------- ------------- ------------- ---------- ---------- ---------- ---------------
  China Export                                                                            
  Statistics                                                                              

  UDG: Swine,                                                                             

  Calendar                                                                                
  Year: 2001 -                                                                            
  2003                                                                                    

  **Partner    **United                                  **%                              **% Change**
  Country**    States                                    Share**                          
               Dollars**                                                                  

               **2001**      **2002**      **2003**      **2001**   **2002**   **2003**   **2003/2002**

  World        221,205,460   214,914,089   216,335,470   100        100        100        0.66

  Hong Kong    201,951,996   197,592,331   199,158,853   91.3       91.94      92.06      0.79

  Macau        19,167,417    17,202,681    17,133,956    8.66       8          7.92       -0.4

  Myanmar      75,911        35,957        33,012        0.03       0.02       0.02       -8.19

  Korea North  4,095         83,120        8,699         0          0.04       0          -89.53

  Mongolia     6,041         \-            750           0          0          0          0

  Kyrgyzstan   \-            \-            200           0          0          0          0
  ------------ ------------- ------------- ------------- ---------- ---------- ---------- ---------------

  --------------------- ---------- -------------- ---------- ---------- ---------- ---------- ---------- ---------------
  China Export                                                                                           
  Statistics                                                                                             

  UDG: Pork,                                                                                             

  Year To Date:                                                                                          
  January - June                                                                                         

  **Partner Country**   **Unit**   **Quantity**                         **%                              **% Change**
                                                                        Share**                          

                                   **2002**       **2003**   **2004**   **2002**   **2003**   **2004**   **2004/2003**

  World                 T          112,051        127,979    178,727    100        100        100        39.65

  Hong Kong             T          40,019         48,069     61,088     35.71      37.56      34.18      27.08

  Korea North           T          6,539          10,494     39,512     5.84       8.2        22.11      276.51

  Russia                T          35,454         38,191     25,576     31.64      29.84      14.31      -33.03

  Japan                 T          5,429          9,082      19,945     4.85       7.1        11.16      119.62

  Singapore             T          7,665          6,721      10,054     6.84       5.25       5.63       49.59

  Malaysia              T          4,954          6,012      6,632      4.42       4.7        3.71       10.31

  Philippines           T          4,845          2,589      4,113      4.32       2.02       2.3        58.85

  Moldova               T          \-             175        2,875      0          0.14       1.61       1542.86

  Macau                 T          1,455          1,807      2,166      1.3        1.41       1.21       19.9

  Indonesia             T          1,186          1,057      1,399      1.06       0.83       0.78       32.4

  Korea South           T          140            751        1,214      0.12       0.59       0.68       61.74
  --------------------- ---------- -------------- ---------- ---------- ---------- ---------- ---------- ---------------

  ------------- ------------- ------------- ------------- ---------- ---------- ---------- ---------------
  China Export                                                                             
  Statistics                                                                               

  UDG: Pork,                                                                               

  Year To Date:                                                                            
  January -                                                                                
  June                                                                                     

  **Partner     **United                                  **%                              **% Change**
  Country**     States                                    Share**                          
                Dollars**                                                                  

                **2002**      **2003**      **2004**      **2002**   **2003**   **2004**   **2004/2003**

  World         163,806,492   181,372,273   295,821,093   100        100        100        63.1

  Hong Kong     60,032,063    68,346,441    94,676,869    36.65      37.68      32         38.52

  Japan         17,084,356    25,438,021    58,616,870    10.43      14.03      19.81      130.43

  Korea North   6,880,482     12,528,121    58,082,106    4.2        6.91       19.63      363.61

  Russia        44,316,179    43,315,347    35,289,052    27.05      23.88      11.93      -18.53

  Singapore     13,273,237    11,793,908    18,461,530    8.1        6.5        6.24       56.53

  Malaysia      6,365,066     7,639,596     8,316,040     3.89       4.21       2.81       8.85

  Philippines   6,414,089     3,335,589     5,079,649     3.92       1.84       1.72       52.29

  Moldova       \-            216,536       4,231,913     0          0.12       1.43       1854.37

  Macau         2,201,428     2,647,362     3,717,181     1.34       1.46       1.26       40.41

  Korea South   197,396       950,981       1,825,913     0.12       0.52       0.62       92

  Indonesia     1,438,762     1,337,314     1,821,866     0.88       0.74       0.62       36.23
  ------------- ------------- ------------- ------------- ---------- ---------- ---------- ---------------

  --------------------- ---------- -------------- ---------- ---------- ---------- ---------- ---------- ---------------
  China Export                                                                                           
  Statistics                                                                                             

  UDG: Pork,                                                                                             

  Calendar Year: 2001 -                                                                                  
  2003                                                                                                   

  **Partner Country**   **Unit**   **Quantity**                         **%                              **% Change**
                                                                        Share**                          

                                   **2001**       **2002**   **2003**   **2001**   **2002**   **2003**   **2003/2002**

  World                 T          171,541        236,213    305,137    100        100        100        29.18

  Hong Kong             T          76,631         85,748     105,010    44.67      36.3       34.41      22.46

  Russia                T          26,491         75,588     70,959     15.44      32         23.25      -6.12

  Korea North           T          5,116          9,012      46,883     2.98       3.82       15.36      420.22

  Japan                 T          11,797         14,197     25,593     6.88       6.01       8.39       80.28

  Singapore             T          19,112         16,345     16,489     11.14      6.92       5.4        0.88

  Malaysia              T          10,196         10,983     14,225     5.94       4.65       4.66       29.52

  Philippines           T          6,418          10,983     7,003      3.74       4.65       2.3        -36.24

  Macau                 T          3,097          3,257      4,157      1.81       1.38       1.36       27.63

  Moldova               T          64             \-         2,451      0.04       0          0.8        0

  Albania               T          1,480          1,832      2,266      0.86       0.78       0.74       23.69

  Indonesia             T          1,600          1,950      2,027      0.93       0.83       0.66       3.97

  Korea South           T          309            372        1,246      0.18       0.16       0.41       235.03
  --------------------- ---------- -------------- ---------- ---------- ---------- ---------- ---------- ---------------

  ------------- ------------- ------------- ------------- ---------- ---------- ---------- ---------------
  China Export                                                                             
  Statistics                                                                               

  UDG: Pork,                                                                               

  Calendar                                                                                 
  Year: 2001 -                                                                             
  2003                                                                                     

  **Partner     **United                                  **%                              **% Change**
  Country**     States                                    Share**                          
                Dollars**                                                                  

                **2001**      **2002**      **2003**      **2001**   **2002**   **2003**   **2003/2002**

  World         255,017,326   343,498,167   438,859,338   100        100        100        27.76

  Hong Kong     114,622,762   125,585,810   151,409,355   44.95      36.56      34.5       20.56

  Russia        29,576,787    93,522,626    83,733,065    11.6       27.23      19.08      -10.47

  Japan         29,045,718    39,590,618    66,419,680    11.39      11.53      15.13      67.77

  Korea North   5,199,897     9,713,019     56,419,869    2.04       2.83       12.86      480.87

  Singapore     32,524,122    28,845,287    28,670,603    12.75      8.4        6.53       -0.61

  Malaysia      12,849,752    14,075,257    17,985,132    5.04       4.1        4.1        27.78

  Philippines   8,418,151     14,164,196    8,861,699     3.3        4.12       2.02       -37.44

  Macau         4,973,904     4,961,135     6,332,646     1.95       1.44       1.44       27.65

  Albania       2,033,460     2,286,386     2,893,921     0.8        0.67       0.66       26.57

  Indonesia     2,036,395     2,523,281     2,562,562     0.8        0.73       0.58       1.56

  Korea South   448,471       518,068       1,583,299     0.18       0.15       0.36       205.62

                                                                                           
  ------------- ------------- ------------- ------------- ---------- ---------- ---------- ---------------

  ---------------- -------- -------- -------- ----------------------------
  CHINA\'S RETAIL                             
  PORK PRICES ON                              
  AVERAGE                                     

  (RMB/KG, USD                                
  1=8.27)                                     

                   2002     2003     2004     \% Change 2004/03

  January          11.00    10.50    12.44    18.48%

  February         11.00    10.50    12.30    17.14%

  March            10.33    10.04    12.65    26.00%

  April            9.77     9.92     13.07    31.75%

  May              9.76     9.68     13.16    35.95%

  June             9.97     9.86     13.73    39.25%

  July             9.74     10.15    14.10    38.92%

  August           10.01    8.22              

  September        10.11    11.03             

  October          10.18    11.56             

  November         10.29    12.41             

  December         10.26    12.43             

  Source: The                                 
  Ministry of                                 
  Agriculture                                 
  ---------------- -------- -------- -------- ----------------------------

  ----------------- -------- -------- -------- -----------------------------
  CHINA\'S RETAIL                              
  HOG PRICES ON                                
  AVERAGE (2002 -                              
  2004)                                        

  (RMB/KG, USD 1 =                             
  8.27)                                        

                    2002     2003     2004     \% Change 2004/03

  January           6.26     6.11     7.58     24.06%

  February          6.26     5.83     7.57     29.85%

  March             5.99     5.83     7.84     34.48%

  April             5.58     5.74     8.24     43.55%

  May               5.54     5.59     8.27     47.94%

  June              5.57     5.75     8.64     50.26%

  July              5.57     6.03     8.87     47.10%

  August            5.73     6.31              

  September         5.85     6.88              

  October           5.91     6.94              

  November          6.02     7.53              

  December          6.08     7.54              

  Source: The                                  
  Ministry of                                  
  Agriculture                                  
  ----------------- -------- -------- -------- -----------------------------

  --------------- ------- ------- ---------- -------------------------------
  CHINA\'S RETAIL                            
  PIGLET PRICES                              
  ON AVERAGE                                 
  (2002 - 2004)                              

  (RMB/KG, USD 1                             
  = 8.27)                                    

                  2002    2003    2004       \% Change 2004/03

  January         8.70    7.75    9.36       20.77%

  February        8.70    7.75    9.89       27.61%

  March           8.95    7.96    10.98      37.94%

  April           7.88    7.98    11.78      47.62%

  May             7.57    7.60    11.83      55.66%

  June            8.04    7.76    12.77      64.56%

  July            7.47    7.98    13.49      69.05%

  August          7.61    8.22               

  September       7.73    10.45              

  October         7.83    8.95               

  November        7.79    9.25               

  December        7.69    9.14               

  Source: The                                
  Ministry of                                
  Agriculture                                
  --------------- ------- ------- ---------- -------------------------------