Slight fall in China's pig prices
Pig prices in China have eased in the last couple of weeks due to meat reserves put on the market by the government and another phase of herd liquidation stirred by ASF outbreaks in Guangdong and Xinjiang provinces. At the end of 2020, the Chinese Ministry of Agricultural and Rural Affairs that the sow’s inventory reached 41.61 million and production capacity 90% of pre-ASF. However, new outbreaks of ASF, some of it with new strains, have forced producers to slaughter some animals in the farms, according to the latest global market report from Genesus Inc. For the last two weeks, prices have been frozen at $4.90/kg after a period when they stood at $5.56/kg due to high demand over the Chinese New Year holiday.
"ASF is still a big concern in the swine industry in China as it is uncertain when an effective vaccine will be available. MARA has reported new outbreaks in Guangdong and Xinjiang provinces since the first of this year. There are other unofficial reports of reoccurring outbreaks and of problems associated with the experimental vaccine.
In addition, it was an unusually cold 'La Nina' winter in parts of the country that has exacerbated problems. Last year Chinese officials banned antibiotics in feed which has slowed weight gain and pigs are more susceptible to diarrhea and respiratory diseases during this cold weather. It is uncertain how serious the situation of these challenges nor the effect they may have upon the recovery.
A futures daily report says the sow inventory has fallen in January for the first time in 13 months and sows slaughter is faster than normal due to ASF outbreaks and low productivity. According to a recent swine industry study report, the proportion of low-weight pigs going to market has reached the worst level since November 2019," explains Lyle L. Jones, Director of Sales China, Genesus Inc.
Also, Bloomberg claims that as much as 15% of the national hog herd may have been lost to disease over the winter and full recovery to pre-swine fever level likely delayed till the second half of 2022. "If it is true and if 15% of the China Sow Inventory (6 million) has been culled, that would be equal to the entire USA production base. Accordingly, one would expect hog prices and imports to decrease as liquidation of sows and light pigs adds more pork in short-term," Mr Jones added.
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