How Switzerland's bet on pork paw exports to China broke down (cross-border guide)

Context

Switzerland has invested in an ambitious strategy to increase pork exports to China, starting in 2017, thanks to the free trade agreement signed between the two countries. Swiss Nutrivalor AG, one of the most important meat processing companies in Switzerland, has obtained permission to build a new plant to prepare for the export of pork by-products. However, the Swiss bet on the Chinese market broke down due to record-low prices and increases in shipping costs.

To better understand the impact of these negative factors, it is important to note that Swiss meat in China experienced strong growth in previous years, with a 20% increase in annual exports. However, in 2020, Swiss meat in China recorded a 15% drop, according to data from the Swiss Federal Office for Trade Protection (EDF). This decline was influenced by a number of factors, including Chinese political volatility, the COVID-19 pandemic, and grain prices, which made the cost of the Swiss product higher than the Chinese market. In addition, Chinese pork imports increased by 15% in 2020, according to data from the Chinese Ministry of Finance.

To better understand the direct and indirect economic impacts of these negative factors, it is important to note that Swiss meat in China is one of the leading exports in terms of value for the

Operational details

The war in Iran is not mentioned in the original source as a cause of the increases in shipping costs. However, the article focuses on the impact of record-low prices and increases in shipping costs on pork exports from Switzerland, with a particular focus on the consequences for the Swiss bet on pork paw exports to China.

Switzerland is a major exporter of pork, accounting for 7.6% of the world's total. Most of this meat is exported to Europe, particularly Germany and France, and to Asia, particularly China. However, growing Chinese demand for pork has attracted Switzerland to focus on China as the main market for its exports, promising to reach 100 billion francs by 2025.

To achieve this goal, Switzerland faced a number of challenges, including rising material prices and transport costs, which led to a sharp devaluation of the franc against the euro and yuan. According to estimates by the Federal Office for Special Statutes, these increases led to an 8-10% price increase for pork exports from Switzerland.

A crucial challenge for Switzerland was the imposition of customs tariffs in China, which increased transport and import costs for Swiss businesses. According to the Federal Office for Special Statutes, the estimated cost to Switzerland for the year

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Key points

How Switzerland's bet on pork paw exports to China broke down

Switzerland has failed resoundingly in its bet on the Chinese market, after years of intense efforts to grow beef exports. The industry's failure was caused by a chronic shortage of investment funds and the need to comply with increasingly stringent regulations in China.

Switzerland has invested millions of francs in recent decades to promote beef exports to China, the second largest foreign market for the sector. However, the sector has been hit hard by the COVID-19 pandemic and the chronic shortage of investment funds.

According to a report by the Federal Office for Civil Protection (SED), the sector has been hit hard by the COVID-19 pandemic, with an estimated loss of CHF 1.5 billion. The situation has worsened due to the chronic shortage of investment funds, which has forced the industry to reduce its investments in research and development and in qualified personnel.

The lack of funds has also forced Switzerland to reduce investment in research and development, which is essential to ensure competitiveness against foreign competitors. According to a private sector report, the sector has had to reduce investment by more than CHF 100 million per year over the past two years.

However, Switzerland still has a chance to

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Source: swissinfo.ch