Inside Pigs
Chinese pig price set to break records
Chinese pig prices will set a record price in the fourth quarter of the year. Rabobank writes this in its new update on the global pig market. The increase is a result of all the outbreaks of African swine fever, which has caused domestic production to stagnate.
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De price for live pigs in China currently averages 17 yuan per kilo (€2,21), which is 15% higher than last month and 40% higher than last year in the same period. In various regions, prices of the equivalent of €2,60 are even quoted, approaching the record price of 2016. The bank expects this record to be definitively broken in the fourth quarter of this year, with a price level of at least 22 yuan per kilo (€2,86). In addition, the bank expects a wholesale price of €3,90 per kilo.
According to Rabobank, Chinese pork prices have experienced even greater growth. The price for pork rose to 25 yuan per kilo (€3,25 per kilo) at the beginning of July. That is an increase of 20% compared to the month of June. In addition, piglet prices have increased by 50% since January to around 40 yuan per kilo (€5,21 per kilo).
Tight stock
According to Rabobank, the cause of the increase in pig prices must be sought in the outbreaks of African swine fever. Figures from the Chinese Ministry of Agriculture and Rural Affairs show that the sow herd fell by 26,7% and the pig herd fell by 25,8% at the end of June. However, in certain regions the figures even rise to 40% to 60%. Rabobank itself expects that the country's livestock population has now declined by more than 40%.
Due to the significant decrease in the number of pigs, pork production fell at the same pace in the first half of 2019. However, the bank expects that the decline in the second half of the year could easily be even greater. In an initial estimate, it expects pork production to decline by 25% this year, compared to the whole of 2018. Rabobank also expects production to continue to decline in 2020, by around 10% to 15%.
Lifting import tariffs?
As the country struggles with declining pork production, China has imported significantly more in recent months. In June, imports increased by 62,8% to 160.467 tonnes, compared to last year. This brings the total import for the first half of the year to 818.703 tons, customs data show.
Almost all traditional exporting countries are exporting more to China, except the United States. This is mainly due to the trade war, although Rabobank expects that this could change in the long term. This is because the United States is going to introduce tariff relief on 110 Chinese goods. This could cause China to take similar steps.