November 24, 2021
Danish Crown chief executive attributes increased Chinese pork imports to recovering pork prices
A steady rise in Chinese pork imports combined with rising fodder, fertiliser and energy costs will underpin a recovery in pork prices over the coming year, said Jais Valeur, chief executive of Danish Crown, on November 23.
A combination of surging Chinese pork output and pandemic lockdowns has upended the global pork market, prompting prices to fall in recent months when prices for most other commodities have risen. European pig prices are currently down over 17% compared to a year ago, EU figures show.
Danish Crown, which produces around 18 million pigs each year, has seen exports to China fall to a fraction compared to last year when it shipped a record 30% of its total production to China.
"The pig market, especially in China, has fallen sharply in recent months. Demand from China has been very, very poor since June," Valeur said in an interview.
After outbreaks of the African swine fever in 2018 brought much of China's pig production to a halt, the country has resumed production at record speed.
China's pork output surged to the highest in three years in the third quarter. But domestic production combined with large imports in the first half of the year have prompted prices to plunge by around two-third this year.
Some farmers in China have sold their herds and exited, while others took the opportunity to get rid of less productive sows.
As a result, Danish Crown's exports to China are again ticking upwards, albeit from a low level, said Valeur.
In addition, costs of fodder, fertilisers and energy are putting upward pressure on prices globally, while the recent low prices have prompted some producers in Europe to halt output.
"We will see a normalisation of the global pig market in the coming year," Valeur said.