'Number of sows in China smaller than figures show'

According to official data, the country had 42,96 million sows at the end of November. That is 1,2%, or 520.000 units, less than at the end of October. The growth of the pig herd, which started quite quickly after the African swine fever crisis (ASF), came to an end in June. At that time, 45,64 million sows were still counted, according to government data. The number of sows in November was therefore 2,68 million lower than in June. A decline of almost 6%.

Isn't shrinkage much stronger?
Although a 6% decline in the Chinese pig herd is already significant, insiders in the Chinese market question the official figures. They see every day that the sector in the country is struggling with African swine fever and that the reproduction figures of the sows used are considerably lower than before the ASF crisis in the country. In addition, low pig prices in the past six months have caused a lack of confidence among pig farmers, causing them to reject sows.

A source who wishes to remain anonymous indicates the following: "In 2020, a huge number of fattening pigs were used as sows on Chinese breeding farms. This was profitable despite the moderate fertility figures due to the extremely high pig prices. Over the course of 2021, the return decreased and ultimately even negative. Many companies have had huge numbers of sows raised in 2020 slaughtered. This has led to a very large supply of heavy pigs in the past year, and a correspondingly large supply of pork."

Insiders also point to the striking and extremely rapid recovery of the Chinese sow herd in recent years. According to them, this indicates that this repopulation has largely been filled with unprofitable, unproductive sows, animals that have now often been culled again. "At one point the sow herd was 40% smaller and many sub-breeding farms were also affected by ASF and culled. Then, in a short period of time, millions and millions of additional sows were counted again. This demand for good breeding animals simply cannot be met at such a time. are fully completed in the short term."

Market price whey permeate as a strong indicator
According to the source, the reduction of the pig herd has gone much faster in recent times than the 2,68 million sows that are now officially counted fewer than six months ago, "We see it in the regions where I am active, among other things, in the prices for a number of piglet feed ingredients."

Over the past year, almost all dairy-related products have risen sharply in price, including whey permeate. This product is largely used in feed for piglets, insiders report. "After we saw very low prices for this product in China in 2019, at the height of the ASF crisis, prices rose again at the end of 2020 to well above world market levels. This was at the time when many sow farms populated with fattening pigs were producing piglets en masse. got."

"Since last spring, prices for whey permeate have started to fall. This despite the fact that the product has become increasingly expensive on the world market. Weipermaat is currently tens of percent cheaper in China compared to the price on the world market. For me it is quite It is clear: there are currently few piglets available in China and that will lead to a tightly supplied market in 2022. In my opinion, whey permeate is a good indicator to indicate the development of the Chinese pig herd. Better than, for example, the requested volume of wheat and soy."

Possibly some perspective for exporters in 2022
Affordable food is a priority of the Chinese authorities and pork is still an important part of the Chinese meal. Calm surrounding price formation is important because it gives producers more certainty. It therefore appears that the peace that is now observed is partly created peace.

While last fall the US Department of Agriculture already hinted at one significantly smaller Chinese pig herd, market insiders clearly see signals pointing in the same direction. Chinese pork imports have already stabilized in recent months (September 310.000 tons, October 300.000 tons, November 310.000 tons) and it is not unlikely that we will see some recovery in volumes in 2022.