July 14, 2025

 

Oversupply, falling prices hit China's pork, poultry segments

 

 

China's major protein categories – from pork to poultry – fell into a severe state of oversupply in the first half of 2025, with prices declining across the board and widespread losses throughout the supply chain.

 

Analysts said weak end-market demand and high inventory levels are weighing heavily on the breeding sector, and that while marginal improvements are expected in the second half of the year, the overall scope for recovery remains limited.

 

The trend highlights the fragility of China's economic recovery under persistent deflationary pressure, with losses now common among livestock farmers.

 

China's consumer price index, a key gauge of inflation, entered positive territory in June for the first time since January, but food prices were down 0.3% year-on-year, the fifth straight month of decline, Lynn Song, Greater China chief economist at Dutch bank ING, said.

 

Most types of food remained in deflationary territory, with the price of pork, down 8.5%, and the price of eggs, down 7.7%, exerting the most downward pressure. Aquatic products, up 3.4%, and fruit, up 6.1%, were among the few categories that saw price increases.

 

Chicken and duck farmers have been hit hard by weak demand, with prices falling to new lows in recent years, according to commodity market information provider Sublime China Information (SCI).

 

A short-term rebound in poultry prices is expected in the second half of the year, potentially driven by seasonal consumption peaks such as the National Day holiday in October. But Sun Yanan, a senior analyst at SCI, said: "Considering the unexpectedly weak terminal demand, coupled with high corporate frozen inventory constraints, the expected positive impact on demand is limited."

 

The supply of white-feather broilers rose by nearly 16% year-on-year in the first half of the year, and broiler duck output increased by close to 25%, SCI data showed.

 

Meanwhile, the average price of white-feather broilers dropped by around 7% year-on-year to ¥7.04/kg (US$0.97/kg or 44.5 US cents a pound). In February, the price for live broiler chicks fell to ¥5.58/kg (US$0.77/kg) – the lowest since 2018 – and it dipped again to around ¥5.6/kg (US$0.77/kg) early this month in some regions.

 

Meat duck prices also remained under heavy pressure, with average prices falling by more than 15 per cent in the first half of this year, and those of some duck by-products, such as duck necks, plunging by over 40 per cent.

 

A report by industry data provider Waterfowl Market said the entire supply chain – from breeding to slaughter – had slipped into losses. It warned that at least one-third of current duck production capacity might need to be eliminated to restore market balance.

 

The hog market has not been spared either. In June, leading listed pig producers in China reported declines in average selling prices on both a year-on-year and month-on-month basis.

 

According to data from the National Development and Reform Commission, the country's top economic planning agency, the average price per kilogramme of live hogs fell to ¥14.45 (US$1.98) in the second week of June – the lowest level in 17 months and well below the 2020 peak of ¥37.83/kg (US$5.17/kg).

 

SCI forecasts that live hog prices will remain at a low level in the second half of the year, ranging between ¥13.76 and ¥15.07/kg (US$1.89 – US$2.07/kg).

 

To curb further losses caused by oversupply and persistently low pork prices, the Ministry of Agriculture and Rural Affairs plans to reduce the national breeding sow inventory by one million, bringing the total down to 39.5 million, CLS.cn, a financial and technology news platform, reported in June.

- South China Morning Post