April 16, 2013
China's pork carcass sales surged after pig carcasses found in river
Following reports pig carcasses found in Shanghai, pig carcasses have also been found in the rivers of Guangdong, Hubei, Hunan, Jiangsu, Sichuan, Shandong and Zhejiang in China, causing a surge in pork carcass sales in major wholesale centres as hog farmers released their animals in fear of a severe disease outbreak.
Although hogs that died of infections may cause harm to humans if they are processed as food, it seems the impact on human health is limited at this juncture. As Chinese diets usually require pork to be fully cooked, the high heat during cooking will kill harmful virus and bacteria. Moreover, the local governments are monitoring the situation closely and the sale of dead pigs is currently curtailed.
In fact, the recent phenomenon arises from the clamp-down by the Chinese government on the sale of dead pigs. In the past, it was common for dead hogs to be either sold to traders who bought them at RMB1/kg (US$0.16) or discarded in the wild.
With falling mortality rates of pigs since winter and spring, live hog inventories remain abundant currently, resulting in the current downtrend of live hog and piglet prices. As of April 13, hogs are traded at RMB13/kg (US$2.10/kg) and piglet at RMB27/kg (US$4.37), a steady decrease since the period of peak demand before the Chinese New Year.
Given the flat inventories of the last few months, late March and early April's panic dumping of swine to the market will lift slaughter volumes in April and result in lower release rates in months to come.
