October 26, 2021
China's agriculture ministry warns potential glut in pork supply
The volume of pork coming into the Chinese market will increase significantly in the fourth quarter this year and the first quarter in 2022, resulting in an oversupply of pork in China during the period, the country's Ministry of Agriculture and Rural Affairs announced at a press conference last week.
"If the production is not substantially reduced, the pork price downturn will be difficult to reverse. In the season of low consumption after the Spring Festival next year, the pork prices may continue to fall, causing heavy losses for hog producers," said Kong Liang, an official with the ministry.
The supply of pork increased by 60.9% year on year in the first nine months, while that number for September alone was 95.2% year on year, according to the ministry.
Many businesses have been lured into the country's hog industry to take advantage of high prices resulting from the outbreak of African swine fever since 2018. However, that has led to a glut of supply three years later.
As a key component of the country's CPI, pork prices plunged 46.9% in September, compared with a year ago, according to data from the National Bureau of Statistics. As a result, the CPI rose by 0.7% from a year ago in September, down from 0.8% in August.
Pork prices have fallen for eight consecutive months, and the average pork price in the second week of October was ¥21.03 (US$3.29) per kilogramme, down 60.8% from January this year, according to the ministry.
During the Mid-Autumn Festival and the National Day holiday, there was still no rebound in pork prices, the ministry said.
In September, the country's hog producers suffered a massive loss of 76.7%, according to the ministry. It said it will focus on the production cut and strengthen market monitoring in an effort to revert the hog production capacity to a reasonable level as soon as possible.
China has also been buying up pork to support prices.