December 13, 2024

 

How China's breeder pig imports correspond to domestic supply

 

In 2023, China's total breeder pig imports reached 7,997, a tremendous year-on-year increase of 51.46%.

 

The increase may appear large, but last year's import volume was only 34.3% of that in 2021.

 

In 2021, China imported 23,339 breeder pigs, reflecting the dramatic fluctuations in Chinese breeder pig imports.

 

Under normal circumstances, the country's annual demand for foreign breeder pigs averages about 10,000 heads. But such a figure can be curtailed by serious events. For example, the African swine fever (ASF) outbreak in 2018-2019 caused China's breeder pig volume to tumble to a record low of 1,018 heads in 2019.

 

Following ASF, the demand for breeder pigs increased sharply, reaching a record high of 29,042 heads in 2020. However, there are exceptions. For instance, the number of imported breeding pigs dropped to 5,280 heads in 2022.

 

On the one hand, the population of breeder pigs in 2020 and 2021 has surged by over 20,000 heads for two consecutive years, far greater than the annual demand.

 

On the other hand, higher standards of large-scale farms and biosecurity measures have helped to improve the quality of domestic breeder pigs.

 

In addition, the production capacity of most pig farms has recovered after the ASF outbreak, hence resulting in a decrease in the demand for breeder pig imports.

 

The import volume of breeder pigs in 2023 is, in fact, still low. However, this shows significant growth, which is related to factors such as the recovery of the domestic pig industry, changes in market demand, and the promotion of breeding policies.

 

As a key indicator of production, the domestic stock of conceivable sows also determines the import of breeder pigs. When the stock of conceivable sows is low, the import volume of breeder pigs in the current or following year will tend to increase accordingly to meet market demand.

 

Conversely, when the stock of conceivable sows is high, the import volume of breeder pigs in the following year will tend to slide accordingly.

 

The import volume of breeding pigs in 2022 was at a historical low mainly due to the high inventory of domestic conceivable sows.

 

Three key players in Chinese breeder pig imports

 

In 2023, the main sources of China's imports were the United States, Denmark, and France, with the US accounting for the highest proportion at 38.78%,

 

Ranking second and third, Denmark and France accounted for 24.63% and 8.83% respectively of Chinese imports.

 

Historical data show that the US has always been China's largest source of breeder pigs, due to its mature commercial breeder system, varieties of breeder species, and good quality of breeder pigs.

 

In recent years, with the upgrade of pig farms and facilities, better-trained farm personnel, and higher quality requirements for breeder pigs, Danish and French breeder pigs with high litter rates are gradually favored by group pig farms.

 

Danish pigs are known for their high litter rate and excellent quality, making them ideal for improving reproductive efficiency on pig farms. French breeder pigs have won market recognition for their exceptional meat quality and growth performance, hence providing consumers with higher-quality pork products.

 

In 2021, China imported 6,992 breeder pigs from Denmark, accounting for 29.96% of total imports. But, in the following year, the import volume of Danish breeder pigs  declined, possibly due to changes in market demand or adjustments in trade policies.

 

Last year, the import volume of Danish breeder pigs rebounded to 1,970 heads, accounting for 24.63% of the total import for 2023. Still, the absolute number remained significantly below that of 2021.

 

The import volume of French breeder pigs has fluctuated greatly over the past five to six years. It was as high as 13,015 heads in 2020, but dropped sharply to 706 heads in 2023, accounting for only 8.83%. Nevertheless, French breeder pigs remain competitive in the Chinese market.

 

In contrast, British breeder pigs have a much smaller market share. A small amount of imports were recorded in 2021, but there were no imports at all in the subsequent two years.

 

Of note, China has not imported breeder pigs from Canada in the past five years.

 

In 2023, the total value of China's imported breeding pigs was US$21.58 million, with an average value of more than ¥19,000 per head. Despite the costly price, this did not stop the Chinese pig industry from importing them.

 

Based on estimations by financial institutions, the highest average profit in the pig industry chain is the breeder pig sector, which is as high as 55%. Including great-grandparent, grandparent, and parent stock breeder pigs and breeder boars, and taking into account the annual renewal rate and price movements, China's breeder pig industry's market revenue is approximately ¥73.6 billion (US$10.1 billion).

 

Since 2022, China's breeder pig industry has seen several major investments, the most sensational of which was in September 2022 when SMIC Seed Industry received an investment of more than ¥2.3 billion from companies with state-owned assets. The company's valuation increased from a pre-investment value of ¥7.757 billion jumped to ¥10.057 billion.

 

In another development, a team led by Professor Li Kui of the Shenzhen Institute of Agricultural Genomics (Chinese Academy of Agricultural Sciences) produced the highly efficient Lansi breeder pig, which was approved by the National Livestock and Poultry Genetic Resources Committee.

 

It seems China is on the way to breaking its dependence on foreign sources for breeder pigs.

 

However, it remains to be seen how domestic breeding technology will affect the import of breeder pigs.

 

About EFL AG-DATA

 

EFL AG-DATA is a startup incubated by Singapore's Nanyang Technological University's Innovation and Enterprise Company (NTUitive) Incubator Program. It is developing an agricultural hub that will revolutionise the feed-to-meat supply chain in China and Southeast Asia countries through data-driven solutions. EFL's mission is to empower farms through innovative data-based services that solve complex problems and enhance productivity.

 

- David Lin, EFL AG-DATA