July 14, 2022

 

COVID-19 lockdowns seriously impact China's meat and feed trade

 

China's COVID-19 lockdowns have greatly rocked the domestic animal husbandry industry.

 

According to data from China's Ministry of Agriculture and Rural Affairs, pork sales on three major e-commerce platforms in March this year totalled 414.81 tonnes, equivalent to the previous month. However, year-on-year pork sales tumbled by as much as 52.09%.

 

Based on eFeedLink's statistics of 53 major pork carcass wholesale markets in China, the average weekly pork transaction volume in March was 8,342.80 tonnes, substantially higher than 7,600 tonnes in normal years.

 

With lockdowns in east and northern China, the average weekly pork trading volume in April fell to 7,287.50 tonnes, a decrease of 12.65% compared with March. China's pork demand decreased 12-15% in April.

 

Shanghai has an annual pork consumption of 13 million live pigs, equivalent to 2.35 million tonnes of pork, of which half is consumed by expatriates in the city. Consumption of pork there fell by 100,000-150,000 tonnes in April 2022 due to the lockdown. Chicken consumption had also tumbled.

 

Lockdown measures have impeded the export of broiler chicks in northern China. Sales of yellow chicks were affected in Guangdong as the clampdown of air transportation hindered deliveries of chicks to other provinces.

 

The lockdown in Shanghai also led to the blockage of shrimp seedling exports along the Beijing-Shanghai Expressway in April. Shrimp seedlings from Hainan, Guangdong and Fujian also could not be properly delivered to coastal aquaculture areas such as Zhejiang, Shandong and Hebei.

 

Meanwhile, the production of aquafeed in April was nearly flat compared with March. The prices of various raw feed ingredients have also risen. As the cost of feed soared, livestock farmers were apprehensive about building inventories, increasing the possibility of price hikes amid tight supplies in the coming period.

 

Meanwhile, Guangdong, a major pig importer, announced on April 15 that live pigs from other provinces and cities would not be allowed to enter the province starting in May. These restrictions resulted in severe pig shortages and thus drove up prices. As of May 16, the price of live pig in Guangdong has surged to ¥18.10-18.20/kg (US$2.71-2.73).

 

China's notorious COVID-19 lockdown policy is not expected to change in the short term. As such, this would continue to affect both supply and demand of livestock products, thus affecting prices.

 

- Shi Tao, eFeedLink