News Pig market
Pig price in China struggles with lockdown
Pork prices in China have been moving downward for 4 months. In order to stop the price fall, the Chinese government has decided to buy up pork again to replenish the state reserves. The strict lockdown in Shanghai has, among other things, a depressing effect on prices.
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An official in China said late last week that the state will again buy 40.000 tons of pork. It is already the fourth round of purchases this year, but so far the fall in prices has not stopped. In the previous three purchase rounds, a total of 118.000 tons of pork was (provisionally) taken off the market.
The average Chinese pig price has been on a downward trend since December last year and is now trading at around 12 renminbi per kilo, which translates to €1,78. For Chinese standards these are bad prices.
Significantly more production
The lukewarm market sentiment is partly due to the sharp increase in production volume. Last year, output increased by 29% to 53 million tons of pork. The growth is mainly due to the big integrations which are often listed. About 20% of China's pig production is now in the hands of listed companies. Five years ago, this was only 5%. The large-scale African swine fever outbreaks in recent years has accelerated professionalization.
Lockdown delays sales
The demand for pork is currently under considerable pressure. This is partly due to the strict lockdown in the Chinese capital Shanghai, analysts in China write. Since the end of March, public life in Shanghai, where some 25 million people live, has come to a standstill and no one knows how long it will last. In addition, large pork stocks hang above the market, including the further growing state reserves.