Exceptionally, some uplifting financial news from the back pages of last weekend’s newspaper.
The greatest gains from trade are possible when products traded are valued highly by purchasers, but regarded as useless (or worse) by sellers. This is the logic behind a recent agreement that the UK and China reached for trade in pig’s ears, tails, feet and other offal. The British expect to receive fifty million pounds a year by exporting parts of the pig that are shunned by squeamish consumers at home. The Chinese gain an increased supply (hence lower prices) of pig meat.
[W]hile in China there may not be enough pig’s ears to go around, in Britain such offal is regarded as inedible. “In Europe, it’s really only the Portuguese who eat pig’s ears,” says Peter Hardwick, the international manager of the British Pig Executive and one of those involved in negotiating the deal. “And the value of most pig offal is negligible. With some of it we even have to pay for disposal. So from an economic and environmental point of view, it makes sense to ship those parts of the carcass to China, where they are treated as food and can be sold at a very high margin.” ….
[A]ccording to Peter Hardwick, “the balance of trade between our two countries is tilted so heavily in China’s favour that there is a huge amount of spare capacity in shipping containers going back in that direction.” In other words, the sea containers that bring our iPhones, kitchen appliances and clothing from China might as well go back full of frozen pig’s ears, rather than empty.
Indeed, the Sino-British agreement has a perfect, Jack Sprat logic to it. The good folk of Britain can go on eating their chops and tenderloins, while the Chinese hoover up the ears, feet and tails they leave behind, laughing, no doubt, at the ignorance of those who discard such treasures.
Fuschia Dunlop, “An offally pig adventure“, Financial Times, 28 July 2012.
Having consumed large quantities of pig tails, ears and feet in feijoada (black bean stew) during the five years that I lived in Brazil, I can verify that pig offal is delicious. The British do not know what they are missing!
Fuschia Dunlop, who speaks fluent Mandarin, won the 2012 James Beard Award for Food Culture and Travel. Her books include Land of Plenty: A Treasury of Authentic Sichuan Cooking (2003), Revolutionary Chinese Cookbook (2007), Shark’s Fin and Sichuan Pepper (2009) and Every Grain of Rice (2012).