The live swine market situation in May is typically a continuation of that in April. The Labour Day holiday showed little effect in lifting the market. Coupled with the release of pork reserves onto the market, live swine prices continued to fall, dipping below RMB32 per kilogram in many regions. Since end February prices of both live swine and pork had been falling; only slight, short-lived rebounds were seen in a small number of regions. Swine production is currently at a slow recovery phase, and inventory of productive sows is at a low level. Prices are not helped by other factors including the impact of COVID-19 on pork demand, the continued release of pork reserves, and significant increase in pork imports.From mid-May onwards, with improvement in pork consumption such as centralised procurement for the reopening of schools, it is expected that prices would bottom out. Holiday periods in the second half of the year would lend additional support, and steep falls are not expected. Swine enterprises are expecting 2020 to be a high-profit year.

The African swine fever (ASF) epidemic is changing the status quo of China's swine industry structure: large corporates are raising capital for expansion; smallholders are either choosing to be contract farms for these corporates or to leave the market; independent, large commercial farms are also benefiting from the profit gains while eliminating affected herds. Biosecurity continues to be the only effective means for disease prevention and control, not just for ASF, but foot-and-mouth disease, pseudorabies, blue ear disease, Mycoplasma pneumonia and other previously common infectious diseases.

 

The peak production season of layer production continued in various regions, with egg inventories being sufficient. However, with average consumption and delivery volumes, egg prices remained weak. As summer approaches, production volumes would go down and it is expected that prices would gradually firm up, leading to a new price trend.

Broiler stocks continued to recover in May, with a month-on-month increase seen. Processed, frozen products from white-feather broilers are key ingredients in the fast food industry. Impacted by COVID-19, end consumption of such products was slow to pick up and prices of white-feather broilers remained low. As a substitute of pork, chicken meat at excessively high price levels would not be sustainable.

May is also the peak production season for broiler breeders. Supplies of day-old chicks are sufficient to replenish stocks. In fact, supplies are exceeding demand and it is expected that prices of day-old chicks would fluctuate in the short term.

For both egg and broiler production, increased housing densities in May had raised requirements for disease prevention and control. The normalisation of drug residue monitoring is leading poultry farms to focus on improving biosecurity and flock immunity.

On April 21, the Ministry of Agriculture and Rural Affairs issued Announcement "Quality management standards for the production of veterinary drugs (2020 revision)" which would come into effect from June 1.

All veterinary drug companies should meet the new GMP requirements by June 1, 2022. Others which have not met the new requirements are licensed to operate until May 31, 2022.