May 8, 2009

China's pork prices are falling but it is not due to fears to the AH1N1 flu outbreak, industry officials in the country said Thursday (May 7).

 

The surplus in pork supply coupled with seasonally low demand for pork have hastened the fall in prices that has been going on since the start of the year, according to the National Development and Reform Commission (NDRC).

 

According to Yao Minpu, vice-chairman of Chia Tai Group, large investment in hog rearing has resulted in more supplies. The price fall is also largely due to a dip in pork consumption from the massive population of jobless migrant farmers, even though stocks are at a normal level.

 

Chinese officials reported that more than 20 million migrant workers have lost their jobs since the start of the global economic downturn. With the government's launch of a stimulus package aiming mainly at the rural economy, Yao said it could help revive the demand for meat in the second half of the year.

 

Yao added that many farmers slaughtered their pigs before they were fully grown out of fears over further price falls, which only accelerated the decline in prices.

 

Meanwhile, with piglet prices falling 13 percent during April, breeders began to adjust their breeding practices and their replenishment interest has waned, according to NDRC.

 

The price falls followed a rapid increase in China's pig numbers over the past two years as farmers were encouraged by the country's subsidies for breeding sows and large breeding farms.

 

Last year, China was the largest importer of US pork as the country faced a shortage due to low breeding inventory and the outbreak of blue ear disease. However, the imports have reduced drastically this year, with 3,766 tonnes shipped in January and February, which was an on-year decrease of 89 percent.