To help ease its domestic pork shortage, China’s state-owned agriculture conglomerate COFCO has agreed to buy $100 million of pork from European pork producer Danish Crown in 2020.
On Wednesday, COFCO said in a statement that the purchase would help the country diversify the origins of its imports and product variety while making purchases more sustainable, Reuters reports.
The companies signed a preliminary purchase agreement during the China International Import Expo in Shanghai.
Although no volumes have been agreed upon yet, Lars Albertsen, sales director at Danish Crown, said the sale is one of the company’s biggest deals they’ve done in a long time.
This announcement is not surprising, given the major pork shortage China is facing at this time as the country grapples with the devastating African swine fever (ASF) virus. Although ASF affects pigs only and poses no food safety risk, the loss of China’s pig herd due to this disease is impacting the country’s pork supply and pushing pork prices to record-high levels.
Danish Crown, Europe’s top pork exporter, has made several deals with COFCO this year. Albertsen said demand is also increasing in Southeast Asia, where the disease is spreading rapidly and production in Europe is also declining after outbreaks in Eastern Europe.
On Wednesday, China announced that it had reopened the market to pork and beef imports from Canada, a decision likely motivated by the need for more pork supplies.
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