July 9, 2004

 
Rising Hog and Pork Prices Drive Recovery in China's Live Hog Production
                 

An eFeedLink Special Report     
 

Below is an abstract of the report: Rising Hog and Pork Prices Drive Recovery in China's Live Hog Production
 

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For a six-month period from August 2003 to January 2004, China's live hog prices have been on the rise and pork prices have also rise in tandem. Backyard pig farmers have been taking in higher profits and the bigger pig farms are reaping reasonable returns from their operations.

With the higher prices, live hog inventories in major hog-producing regions have stopped falling in the first quarter of 2004 following four quarters of consecutively lower live hog inventories recorded last year. Live hog production in China is currently seen would make a sustainable gradual recovery.

Prices of pork and live hogs have remained high in the first and second quarter of 2004. In some areas, they have already reached historic highs. In late-February, procurement prices for live hogs in Hebei province were at RMB 3.80 per 500g, while the retail prices of pork were at RMB 6.50 per 500g. Both figures were up by 40% compared to prices for the same period last year.    

With the continual rise in pork prices, the economic returns for Chinese pig farmers have improved significantly. Although prices of piglets and feed have increased continually, such higher production costs were balanced by the higher prices for pork. Profit from the sales of live hogs during the first quarter this year has been reasonably good.

According to statistical releases, China's cultivated land had shrunk by 100 million mu   (equivalent to 6.67 million hectares) in the past seven years (1997-2003). Over the same period, the production of grains declined by 70 million tons, while the Chinese population has grown by 70 million compared with the population in 1997.

With the sharp decline in crop acreages and increasing population, China's demand for pork products is seen would continue to outstrip supply. With restraint to increase supplies, prices of hogs and pork will continue to remain high in China.    

More contents in this 4-page report include:     

• Production of Live Hogs in Hog-Producing Areas Stabilized
  
  
• Limited Supply of Live Hogs in 2nd Quarter 2004