Inside Pigs
Pig production in China takes big steps
China has been rebuilding its domestic pig population for some time after African Swine Fever (ASF) hit the country on a massive scale. The number of pigs is now increasing again and significant growth has been achieved in the first 3 quarters of 2020.
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After African swine fever (ASF) significantly depleted the domestic pig herd in 2017, Chinese pork imports have grown significantly. Record levels of pork were imported this year. The country is now busy recovering domestic production and the number of pig farms has increased considerably.
The number of pig farms increased over the first three quarters of this year. As many as 3 new large-scale companies have been built and 12.500 non-active companies have been restarted, according to figures from the Chinese Ministry of Agriculture.
pig stock
China's pig herd has generally grown throughout the year and stood at around 370 million head at the end of September. Compared to last year, this is an increase of 20,7% and the level is recovering to a capacity of 84% compared to the end of 2017. The number of breeding sows grew to 38,22 million units and thus reaches 86% of the capacity in comparison with 2017.
Pig prices
With the smooth recovery of the pig herd and therefore also pork production, pig prices have started to fluctuate. After February, the market price showed some fluctuations, but since September prices have generally fallen. Since then, the market price has fallen for 7 consecutive weeks and is now trading at 50,56 yuan per kilo, equivalent to around €6,57. This means the price level is 9,08 yuan lower than the record level in February this year.
Import requirement
Now that China itself is going to produce more pork again, it is self-evident that the need for imports will eventually stagnate. The US Department of Agriculture (USDA) previously predicted that China will import about 2021% less pork in 6. Rabobank expects that this decline will be much steeper, namely a decrease of 20% to 30%. They therefore warn of a surplus of pork. If Chinese import needs decline sharply, but exporting countries continue to produce at the same levels, pork production will exceed demand.
On the other hand, it cannot be said with certainty that Chinese domestic production will be able to continue its recovery soon without setbacks. The country is still struggling with ASF outbreaks. In general, the situation appears stable, but as more pigs are transported, the risk of further spread of the virus will increase further.