December 21, 2007

China's pork shortage to impact world meat and feed

The shortfall of pork in China caused by Porcine Reproductive and Respiratory Syndrome (PRRS) outbreak is foreseen to impact world meat and feed as the country produces and consumes half of the world's pork.
 

China's pork prices rose sharply during the third quarter of 2007 compared to last year, up 98 percent in Liaoning province, 81 percent in Sichuan province, and 62 percent in Guangdong province, according to the UN Food and Agricultural Organization (FAO).

Escalating prices indicate a meager domestic pork supply due to a significant reduction in China's 2007 pig output, brought about by an outbreak of PRRS disease or the Blue Ear Disease.

Over one million pigs have been lost as a result of PRRS. Piglet prices have surged and by August 2007 were 2.6 times higher on-year.

Other culprits to pork reduction include high feed prices, with quotations of maize 15 percent more expensive than a year ago and 25 percent above their levels of two years earlier.

The increased non-agriculture job opportunities also led to shortages or higher cost of labour in rural areas, triggering a significant drop in backyard pig production in recent years.

Rocketing prices stirred a negative impact on meat consumption, especially for low-income populations whose share of food in total expenditures in almost 50 percent. Although Chinese consumers have shifted from pork consumption to other meats, this substitution has been very limited as the rising pork price has pushed other meat and all food prices up, FAO reported.

Furthermore, world meat and feetwill also feel the impact of the Chinese pork shortage. The country's pork imports, including formal and informal trade, are reported to be gargantuan throughout Southern China in 2007. The relatively lower increase in pork prices in Guangdong may be a result of the rising amount of pork imports in South China. 

In order to revitalize pork production, the Chinese government recently adopted several policies and measures, including a direct cash subsidy for sows, an insurance subsidy for sows, improvements of the swine breeding system, a subsidy to counties with large swine and pork exported to other counties, and new solutions for land and loan issues related to pork production.