$61 billion invested in the Chinese swine sector
Pig farming is a sector that attracts new investors in China. According to the latest report from Genesus, the overall investment is amounted to 400 billion RMB ($61.28 billion) in 2020, about 4 times the investment in 2019. The major investors are New Hope, Zhengbang, East Hope and others include Muyuan, Tianbang, Jinjizhining, and Dekang. "China’s imported a record 27,000 pigs from overseas 2020 to help resupply its breeding farms with high-quality genetics. The previous record was 17,300 heads in 2013. According to the Ministry of Agriculture and Rural Affairs, by the end of November, the inventory of live pigs and production sows had recovered to more than 90 % of the annual level. By the end of September, China's live pig inventory had reached 370 million, returning to 84% at the end of 2017. The inventory of production sows reached 38.22 million, returning to 86% at the end of 2017," explained Lyle L. Jones, Director of Sales, Genesus Inc., China.
Currently, China’s slaughter pig price stands at 33.9 yuan ($5.2) per kg, not far from the prices reported in December 2019. Analysts are expected prices to go down this year, as China is rebuilding its pig herd but the decline will go slowly as the demand for pork is still high. "There are many commentaries warning about falling hog prices due to overexpansion. We have seen photos of 26 level pig buildings and 80,000 sow farms, as well as read the reports of all the money that has been pouring into the industry. No doubt pig prices will drop, but it is a question of to what level and when. Many factors will be involved, but the Market Price is the key indicator to watch," added Mr Jones.
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