Inside Pigs
Chinese sow herd up, pig price down
The decline in China's pig herd has bottomed out. At least, if we are to believe the latest figures from the Chinese Ministry of Agriculture. Pig prices in the country have passed their peak and are now falling sharply.
Read this article?
Become a subscriber and get instant access
Choose the subscription that suits you
Without mentioning exact numbers, the Chinese ministry reports that the number of breeding sows grew by 0,6% in October compared to the previous month. This means growth has returned for the first time since April 2018. The total pig herd showed a shrinkage of 0,6% in the past month.
However, the contraction does show a leveling off, as in previous months there was a contraction of 3% and 9,8% respectively. The high prices of recent months are expected to encourage pig farmers to increase production to scale up again.
Reached a low point?
Since the first outbreak of African swine fever (in August 2018), China's pig population has depleted enormously. In addition, pork production has fallen by 40% due to this animal disease. Rabobank expected the number of pigs in China to halve, but now it appears that this will not happen. After all, the latest figures have shown that the bottom has been reached.
Whether the recovery will continue remains to be seen. It should be noted that figures from the Chinese (agriculture) ministry are not always considered reliable. However, it is the only measurement. There is no other support.
Pig prices plummet
After Chinese pig prices rose to record highs at the end of October, the downward trend has started. Moreover, the decline is rapid. This is striking, because the meat market (which is suffering from major shortages) is working towards the celebration of the Chinese New Year (Saturday, January 25). The average pig price has fallen by 20% since November to 32,35 Yuan per kilo (live weight). This is €4,17 per kilo. The price is an average of all quotes per region or province. In the south, where shortages are greatest, prices are significantly higher than in the north.
The reason for the decline is difficult to explain. The October count may have little influence, because the figures will only be known for a few days. This rapid decline may be a result of panic sales by pig farmers. In that case, the price drops are likely to be short-lived. Prices usually increase towards the celebration of Chinese New Year.