April 13, 2009

After it was botched last year due to concerns of insufficient trade and global economic woes, China plans to re-launch hog futures by end of 2009, an industry official said Friday (April 10).

Qiao Yufeng, vice president with China Animal Agriculture Association hopes that trading will be active once the hog futures are being commenced.

Qiao said preparations were complete in regard to the quarantine and transport of live pigs.

Brokers had previously attributed the suspension in part to complex requirements demanded by regulators on the transport of live pigs.

Qiao said the increase in pig inventories for the past two years--in response to Beijing's subsidies to encourage breeding of sows -- had resulted in a surplus and pressured domestic pork prices.

Pork prices, which drove inflation to a decade-high early last year, fell by as much as 20 percent last month from a year ago.

The official expects pork prices to get worse in the first half of 2010 due to falling consumption as millions of jobless migrants are spending less on meat.

But given the current low breeding costs, the return-cost ratio was still normal, and the government has not initiated its stockpiling plan on pork, he said.

According to the US Agriculture Department, China--the world's largest pork producer and consumer--is expected to increase its pork output by 3 percent to 46.2 million tonnes this year.