June 8, 2021

China's hog prices falling since start of 2021


China's hog prices have been on the decline since the start of 2021 - a development that is expected to help reduce hog imports, Global Times reported.


As of June 5, the average national hog price had dropped to ¥17 (US$2.6) per kilogramme from a high of ¥37 (US$5.79) at the beginning of the year, edging back to the level in late 2019 when prices began to rise due to the outbreak of African swine fever (ASF).


Farmers who bought piglets at the start of 2021 are reportedly suffering huge losses — as much as ¥1,000 (US$156.47) for each pig.


Pigs sales revenue in May fell from the previous month, according to data from major hog farms.


A file released by Zhenghong Science showed that it sold 8,500 hogs, down 41% from April. Another top hog producer, Muyuan Foods, said its sales revenue dropped to ¥6.78 billion (US$1.1 billion) in May, down 14.44% from April.


The fall in prices is due to the recovery of local production capacity, Li Guoxiang, a research fellow at the Chinese Academy of Social Sciences, told the Global Times. He predicted that hog imports in the second half of 2021 will be significantly reduced, as domestic hog prices return to normal.


"The domestic hog output is expected to satisfy market demand in the second half of the year," he said.


China's consumer inflation ran at a low level in April, at a 0.9% gain year-on-year, while wholesale inflation continued to rise due to elevated bulk commodity prices, official data showed.


Along with a rapid recovery of live hog output and a drop in market demand, the price of pork plunged a whopping 21.4% year-on-year in April, which made a considerable contribution to the low consumer price index in April.


The output of pork in China is likely to hit 50 million tonnes in 2021, up 20% from 2020, and prices will continue to drop as a result, said a report from the Rural Development Institute of Chinese Academy of Social Sciences.


The accumulation of expertise in dealing with ASF in recent years and COVID-19 prevention measures will put hog production on a speedy growth path this year, said the report.


During 2020, China imported 4.39 million tonnes of pork, a year-on-year increase of 108.3%, but the pace has slowed ever since.


Official data showed that in the first quarter of 2021, China's pork imports reached 1.16 million tonnes, an increase of 22.11% year-on-year. The top three source countries were Brazil, Spain and the United States.


- Global Times