Pork prices continue to rise in China

Pork prices continue to rise in China. The price of slaughter pigs in China surpassed 18.5 yuan/kg after two years of price decline following an irrational increase after the ASF outbreak. According to the Xinmu Network’s pig price index on June 11, the national average price reached 19.3 yuan/kg, while the average price in Jiangsu and Anhui hit 20 yuan (US$1.27/lb) live weight.

Pig prices in 17 provinces across the country rose across the board. Internet media headlines indicate that the industry is “at a boiling point.” Due to significant sow elimination due to disease outbreaks, or simply due to financial constraints, domestic supplies have dwindled and prices have soared. Often seen as a barometer of the future, the price of 7kg weaner piglets soared from 175 yuan (US$24) in January to 750 yuan (US$103) on June 12. The quadrupling of prices in just 5 months has producers increasingly optimistic about the future. According to Xinmu.com, the new hog price index for June 11, 2024 was 125.12, up 1.42 points from a day earlier.

There is plenty of reason for optimism in the Chinese market for the foreseeable future. According to China’s Ministry of Agriculture, the sow herd fell 6.9% year-over-year to 39.86 million. But those figures are based on capacity, not actual stock. Industry sources say large farms are idle, with many operating at 50-60% capacity. Pork production capacity has been declining for 15 months and has been at a low level since 2021. No one can argue that actual production has declined for 5 consecutive quarters.

As a result of the apparent change in supply and demand, some industry analysts predict prices will exceed 24 yuan/kg for slaughter pigs and 1,000 yuan per unit (US$140) for 7 kg weaner piglets.

Tags: pork, prices, China