China

Pork prices in China to jump by 70% in the next months

Pork

Tighter supplies of pork meat in the domestic market and the ongoing trade war with the US could lead to a dramatic increase in pork prices, say officials.

Posted on Jun 25 ,12:14

Pork prices in China to jump by 70% in the next months

China's ASF situation is creating a storm in the domestic pork market, with officials from the Ministry of Agriculture foreseeing a spike in prices of 70%, according to Nikkei Asian Review.
Despite the efforts in containing the spreading of the African Swine Fever (ASF), 60% of the pig farms in China are small-base operations and they will continue to disregard the recommendation in increasing the biosecurity level until they will be forced out of business, as Yang Hanchun, a professor at China Agricultural University in Beijing predicts.

In April, China's pig herd was down by 21% compared to the same month last year, at levels never seen since early '90's, according to a Rabobank report. In that case, the decrease could go even far than the 30% contraction foreseen by USDA and Rabobank analysts.
At the same time, a trade war opened between the American and Chinese administrations is reducing the volume of US pig meat and pork into China due to duties up to 60% imposed on these products.

The same opinion is expressed by Jim Long, President and CEO of Genesus Inc, who predicts that prices are going to hike starting next month, as China is depleting fast its pork supplies. " ASF is still sweeping China and pig inventory will continue to decline. We expect beginning July-August to see the China price rocket higher. All hog producing countries will benefit from this demand", he explained in its latest market report.
According to Mr. Long, the decline in the Chinese sow herd is going to be far more accelerated than anyone foreseen by now, around 50% (-20 million sows). That will also increase the demand for breeding stock in China to a monumental level. Prices are already showing this as China's 15Kg pigs are selling now at $155/head. That could lead to a price of $500 for a market hog in the following months.

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