February 12, 2020
Pork prices in China reach record highs after coronavirus restrictions
Restrictions on swine transport and start delays of slaughtering plants due to the coronavirus outbreak in China has pushed pork prices close to 2019 record levels, reported Reuters.
Zhao Yuelei, Cofeed analyst, an agriculture consultancy said with restrictions imposed on transportation, purchasing swine has become difficult. Many provinces in China extended the Lunar New Year holidays for a week and placed movement restrictions due to the coronavirus outbreak.
He said live swine stocks remained low in the market, resulting in higher pork prices.
According to data from Cofeed, pork prices hit 51.21 RMB (~US$7.34) per kg on average on February 11, 2020, a slight increase from 48 RMB before the Lunar New Year and close to October 2019's 54 RMB. This is different to previous years, where prices for pork usually drop after the Lunar New Year holidays.
A lockdown on many cities, as well as transport restrictions has made it difficult for swine to be transferred to slaughterhouses, with few staff available to operate the facilities.
Zhao said while agriculture and rural affairs ministry has called for food production to be country's priority, restrictions and disease prevention measures have stayed in place.
Bai Shanlin, C.P. Pokphand chief executive said several of its slaughterhouses have reopened. The company is one of China's top pork producers.
Bai said the company expects to boost production in 2020. C.P. Pokphand slaughters 350,000 every month on average.
He added that workers returning from coronavirus affected areas will be quarantined for two weeks before resuming work.
These problems related to logistics and labour issues have only made worse the domestic pork supply shortage in China, already decimated by the African swine fever outbreak.
XiongKuan, COFCO Futures analyst said China's pork consumption remains high and unaffected by the coronavirus outbreak.
However, Xiong said piglet and sow sales orders have been delayed by a month, or longer in other regions in China. This may impact pork supplies in the second half of 2020.
Xiong added that swine farm restocks have been slower than anticipated, with new farm constructions affected. Large sow herd losses have forced China's swine industry to use female swine, meant for meat to be used for breeding instead.