Background Pigs
Is the Chinese pig population really recovering?
China says it is well underway with the recovery of the domestic pig population, which was severely depleted by the African swine fever (ASF). In their own words, the capacity is back at 90% of pre-AVP level, but according to sector analysts, the recovery of the breeding system is not yet out of its infancy.
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China has released reports of the recovery of its domestic pig herd. Provincial and local governments also published about production increases. But, under the radar, other reports were less enthusiastic about the state of the industry. For example, disease and productivity issues raise concerns about the health of the industry.
Sow productivity
The repopulation has been carried out with sows that are not intended for breeding, which has led to lower productivity. Due to lower productivity, the sows are used for breeding for a shorter period of time. The lower productivity means that more sows must be kept to maintain the number of farrowing animals and replenish the pig supply. In addition, a report from Futures Daily states that sow stocks fell in January for the first time in 13 months.
Pig import
The extent to which China is really on the road to recovery of its pig herd is partly reflected in the import figures. Customs data shows that live pig imports resumed last year after being halted in 2018 and 2019. Data also shows that most live pig imports occurred in the fourth quarter last year. The fourth quarter saw a strong increase in live pig imports, indicating that the recovery of the breeding herd is still in its infancy.
AVP
In addition to the productivity problems that breeders face, ASF still lurks. China does not appear to officially report all outbreaks, but outbreaks have been reported in both January and February since the beginning of this year. New mutations of the virus have been found and hereby the use of illegal vaccines is accused.
State reserves
Meanwhile, China has been several times since the beginning of this year pork brought to market from stock in an attempt to reduce the high pork price. Which also makes the recovery of the domestic pig supply somewhat questionable. It should be noted that these batches of pork were released to ensure that there was enough pork available in the run-up to the Chinese New Year, when additional pork is typically consumed.
Expectations about recovery are divided
How far China really is in restoring its domestic pig herd can therefore be questioned. Expectations about the country's recovery and import needs are therefore divided. So expected the Rabobank that China will import 30% less meat this year, but analysts from America expect that the Chinese pig stock will decline further this year. They therefore expect the import requirement to increase further in 2021.