China is set to increase its pork imports in coming months, industry participants have said, after losses suffered by farmers last year in the world’s top pork producer caused a reduction in pig production which seems more important than the official data suggest. Pork is by far China’s favorite meat and soaring prices have driven up inflation in the world’s second-largest economy at a time of slowing growth. The country produces about half of the world’s production and fluctuations there influence pork and meat prices globally.
China’s pork prices jumped 51.8% in October from a year earlier, the National Bureau of Statistics said, even as third-quarter production rose 0.7% from the previous year. last year. Pig prices will remain high in 2023 due to lower supply, according to 10 industry analysts, farmers and feed and genetics suppliers, although they warned that demand could be affected by the China’s COVID measures.
“We all have to watch China; we expect an increase in sales due to their shortage of pork,” said Jim Long, general manager of Genesus Inc, a supplier of breeding pigs in China, in a note last week. live pig prices
The government has blamed farmers for withholding pigs from slaughter to fatten them further for the higher prices, but analysts and experts say there has been a substantial reduction in supply since last winter. However, the Ministry of Agriculture and Rural Affairs has repeatedly stated that the breeding capacity is sufficient.
“The elimination of sow production capacity could be bigger than the current market imagines,” Guan Yilin, an analyst at Cofco Futures, said in a note last month. Falling pork demand and high feed costs from June 2021 to July this year have caused farmers to suffer losses of up to 600 yuan per pig. Breeders sold herds, eliminated more sows than normal or slowed production by not mating females to limit their losses.
Genesus believes the sow liquidation is higher than reported, estimating the sow herd has shrunk by 6-8 million head. With fewer pigs born at the end of 2021 and the first quarter of 2022, the number of pigs ready for slaughter has fallen this summer, said an executive at one of China’s top producers.
The Ministry of Agriculture says China had 44.6 million sows in September 2021, falling to 41.85 million in March 2022 before jumping to over 43 million in September. “The reported total number of sows is inflated,” said Zou Zhihong, China manager of U.S. farm equipment supplier Hog Slat Inc.
“A lot of barns are still empty,” he said. Neither the agriculture ministry nor the statistics office responded to requests for comment on their data. The Department of Agriculture said information on key indicators such as breeding sows should be released more often to better guide production.
China has 20 million smallholder farmers who move in and out of pig farming frequently, depending on market conditions, making it difficult to compile accurate data. Farms are also not reporting deaths from diseases like African swine fever.
Still, analysts said only a supply shortage could trigger such high prices. “If there were so many pigs, the price could not reach this year’s dramatic level,” said Xiao Lin, an analyst at Huachuang Securities.
Feed suppliers have also noted the decline in production. Pig feed production fell 8% in the first eight months of 2022 from a year ago, according to the China Feed Industry Association. “We find that there are not enough fatteners,” said an official of a feed producer that supplies more than 100 medium-sized pig farmers across China.
“I think there are 25 to 30% less fattening than a year ago.” The US Department of Agriculture reported 39,500 tons of pork exported to China in the week ending November 3, compared to an average of 24,120 so far this year.
“I expect more shipments to come in the fourth quarter,” said Rabobank senior analyst Pan Chenjun, adding that imports in 2023 will be higher than those in 2022. ($1 = 7.1552 yuan renminbi Chinese)
(This story has not been edited by the Devdiscourse team and is auto-generated from a syndicated feed.)
#Chinas #pork #imports #set #rise #questions #pig #herd #size #Company