July 26, 2021

Will Henan flood catapult China hog prices? (week ended Jul 22, 2021)

 

By SHI Tao

 
 

Heavy rains, abrupt opening of dams without prior warning and incompetent crisis management have resulted in a disaster in Henan province. Other than Zhengzhou, which is the worst hit, Luoyang, Pingdingshan, Jiaozuo and many areas were flooded as well. The fact that Henan is in the centre of China and hence a crucial transportation hub, and that it is the largest pork processing province raises concerns that pork prices might rally amid shortages.

 

The importance of Henan hog industry

 

Before the outbreak of African swine fever (ASF) in 2019, Henan's annual production of hogs was more than 60 million, accounting for over 10% of China's production. It was one of the largest provinces with intensive hog farming (the other is Guangdong). Henan was also one of the hog exporting provinces providing for other regions and the most important province in China's pork industry chain. It had the largest hog slaughter and pork processing company, and the nation's largest farm with farrowing units. Moreover,  Henan imported a large number of finishing hogs from the northeast for slaughtering, and many other hogs from northern China passed through Henan to other parts of the country. .

 

Full version of the report will be available at: https://spoutinfo.com/market-forecast-detail/30/32/277/3448