June 17, 2011

 

Record pork prices boost China's hog herd expansion
 

 

Chinese hog raisers are rebuilding herds of hogs, as soaring pork prices raise enthusiasm for expansion, the Ministry of Agriculture said.

 

Pork prices in the world's largest consumer and producer are close to the record highs hit in February 2008, due to low stocks at the beginning of the year and rising corn and labour force costs.

 

Hog stocks as of May 31 edged up 0.8% from April, while the number of hogs for sale rose 3.1%, the ministry said in a statement Wednesday (Jun 15), citing a survey of more than 2,000 major hog-raising cites. Both hog stocks and the number of hogs available for slaughter in May rose for a third consecutive month, it said.

 

The ministry expects hog prices to remain high, but pork supply can be ensured as farmers' confidence is on the rise, the ministry said.

 

"Pork prices will see limited downside risks," it said.

 

Last week, piglet prices in 470 markets monitored by the Ministry of Agriculture soared 108% from a year earlier, suggesting considerable enthusiasm to expand hog production.

 

The average wholesale pork price rose to RMB22.52 (US$3.48) per kg in the week to June 10, approaching the record high of RMB22.88 (US$3.54)/kg touched in February 2008, the Ministry of Commerce said.

 

Pork prices are set to rise further in the near future, after hitting a three-year low in the middle of last year. The low prices in mid-2010 forced many hog farmers to exit the industry, leading to reduced supply this year, analysts said.

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