Chinese pig price unexpectedly picks up again

First the average Chinese pork price. The price increase did not happen yesterday, but has been happening since the end of March. Since then, the average pig price rose from 12,30 renminbi to 15,37 renminbi per kilo. This amounts to a price increase of 25%.

The price increase is related to the coronavirus. We can't imagine it anymore, but strict lockdowns are still in force in some Chinese cities. Including in Shanghai, the largest city in the Asian country. This has far-reaching consequences for public life and therefore logistics. It is chaos in the ports. Incoming containers are not unloaded, while outgoing freight does not depart.

Vion indicated last week when asked the problem to recognize. Although Chinese meat import figures have plummeted, foreign supplies are important. Now that it is faltering, pork prices are picking up. Chinese market analysts also write that the transport of live pigs is stagnating. Many pigs are bred and fattened in the north and slaughtered in the south.

Chinese government purchase program
The pork price also receives support from the Chinese government's meat purchasing program. This week another 40.000 tons were purchased. Including the six previous purchasing rounds, the stock has increased to approximately 240.000 tons. Another factor is the shrinkage of the Chinese sow herd. Since the peak moment in 2021, according to Bloomberg, there has been a contraction of 9%.

This shrinkage is due to poor earnings and increased feed costs. However, the animal numbers are still slightly above the 'normal level'. The contraction relieves the market, causing pig prices to respond more quickly to demand impulses, analysts indicate. However, it is not expected that Chinese pig prices will be able to rise to significantly higher levels. Partly because pork consumption has lost ground and Chinese people have switched to poultry meat.