April 19, 2021

China's Q1 pork production up 32%, highest in two years

China's pork production in the first quarter of this year increased 31.9% to 13.69 million tonnes compared to the same period in 2020, the highest quarterly volume in two years, Reuters reported.

The increased pork production follows massive investments in rebuilding the domestic swine industry after African swine fever devastated the country's swine herds in 2018 and 2019.

Data from the National Bureau of Statistics showed domestic swine herds are up 415.95 million head by the end of March, 29.5% higher on the year, and up from 406.5 million at the end of December.

Pan Chenjun, senior analyst at Rabobank, said the fundamental thing is there are more swine in the herd, adding that average slaughtered swine weights were lower than last year. This shows liquidation by farmers, and a cause for the increase in production.

Major Chinese swine producers such as New Hope Liuhe , Jiangxi Zhengbang and Tech-bank Food Co Ltd have said they culled inefficient sows during the quarter. This totaled to about several hundred thousand swine, which resulted in higher meat production.

PORK-CN-TOT-D pork prices dropped more than 40% since the start of 2021 due to the big slaughter volume, but prices are increasing this week.

Darin Friedrichs, Senior Asia Commodity Analyst at StoneX Group, said this could mean swine supply has not returned to normal. He said live hog prices have dropped 15% and increased 15% in the past two weeks, which doesn't give the look of a return of supply.

According to Reuters' calculations, China's Q1 pork production reached its highest level since Q1 2019 when 14.6 million tonnes of pork were produced.

China's General Administration of Customs data showed China's meat imports reached 2.63 million tonnes between January to March 2021, 20.8% up compared to same period in 2020.

- Reuters