China invests heavily in Argentine pork

China will participate in a multi-billion dollar investment in Argentina's pig sector. With the money, the country wants to increase meat production in order to be assured of meat. This is reported by the Argentine Ministry of Foreign Affairs.

The Latin American will receive a total of approximately $3,8 billion in investments. The country aims to double its pork production in the next 4 years. The aim is to increase the Argentine pig herd by 300.000 sows.

The intention is to increase the sow herd by 60.000 sows in the first year, and in the next 3 years the sow herd should increase by another 80.000 per year. The authorities' document also states that the investment project has a 7-year repayment term and a 21,3% return.

Over the years, the Argentine pig sector has grown considerably. Argentina currently produces about 700.000 tons of pork, compared to 2009 this is an increase of no less than 250%.

Export to China
The Chinese interest in growing the Argentine pig herd is based on self-interest. China is continuously looking for ways to rebuild its pork stocks after the pig population has been drastically reduced by outbreaks of African swine fever. With this investment, Argentina will be able to offer China many years of security of supply. About 882.000 tons of pork is expected to be produced, destined for the Chinese market worth about $2.500 million.

Pork from stock
Meanwhile, China regularly markets frozen pork from stock in an effort to keep prices down. This Friday, the country will again bring 10.000 tons of pork from state reserves on the market, it was announced yesterday (August 18). In the meantime, China has already released approximately 500.000 tons of pork from stock that year.

Chanti Oussoren

Editor at Boerenbusiness who studies the dairy, pig (meat) and feed markets.

c.oussoren@boerenbusiness. Nl

© DCA Market Intelligence. This market information is subject to copyright. It is not permitted to reproduce, distribute, disseminate or make the content available to third parties for compensation, in any form, without the express written permission of DCA Market Intelligence.