May 2, 2012

China starts local pork buying

China has started to purchase and stockpile pork and pigs in a drive to strengthen farm prices.

Reuters news agency reports that China made its move when prices dipped to US$2.30 per kg last week, below the 6:1 ratio of pork: grain prices the government maintains.

"If they're buying domestic, it would not seem to bode well for our exports," Elaine Johnson, an analyst with CattleHedging.com, was quoted as saying about US packers.

Last year China imported a record 667.7 million pounds of pork from the US, up from l55.9 the previous year when North American hog farmers were still in dire financial straits.

The increase in North American pork exports combined with a slight decline in hog production has restored profitability to hog farming.