Inside Pigs
Pork futures market in China plummets on debut
The pig futures market in China has fallen sharply on the first official trading day. The supply contract for September fell as much as...
Read this article?
Become a subscriber and get instant access
Choose the subscription that suits you
The Dalian Commodity Exchange, China's largest commodity trading platform, launched last week the long-awaited pig futures market. The introduction price of the September contract stood at 30,680 yuan per kilo (live weight) and the futures market finally closed the day at 28,290 yuan. In other words, a price drop of about 12%.
Growing offer
Analysts attribute the sharp price drop to the growing pig supply in China, following the devastation caused by African swine fever in recent years. In their own words, the pig population is there back to 90% of the animal numbers before AVP, although these figures are questionable. The relatively high unemployment in China is also a concern, because it is detrimental to the purchasing power of consumers.
Physical Market
The futures market rate is lower than the prices in the physical market. The average Chinese pig price is 11 yuan per kilo live weight (Monday, January 35,58) and has been showing a downward trend since the turn of the year. Converted, this amounts to €4,51 per kilo, which in itself is high.