Price slump hits Chinese pig farmers

By Mark Godfrey, in Beijing

- Last updated on GMT

Related tags: Pig, Livestock, Pork

A slump in prices means China’s pig farmers are having a lousy run-up to the upcoming Chinese New Year festival. Industry experts have blamed the price slump on a combination of factors, including higher pig numbers and epidemics brought on by warmer weather in the northern regions of the country.

The weak data unravels a period of consistent price increases, which began in June and suggests the annual spike in the run-up to the Chinese New Year festivities has now passed. The fall has been precipitous thus far: from RMB15.60/kilogram on 1 January to a national average of RMB13.20/kg on 22 January, according to data published by the agricultural ministry. Prices have fallen as low as RMB11.20/kg in Suqian city in Jiangsu and RMB11.80/kg in Jinzhou city in northerly Liaoning province.

Pig finishers are taking a hit of RMB108.50/head, according to well-known pig industry analyst Ji Guanglin, who says that, a year ago, farmers were making RMB413.50/head. Pig slaughterers had been helped by an unusually cold winter in 2012/13, whereas warmer weather this winter has caused a surge in epidemics and a sell-off by farmers worried about their pigs contracting disease.

At the retail level, average prices have stayed stable, ranging from RMB23.81/kg in the north east to RMB26.43/kg in the north-western provinces. Experts on the producer side, meanwhile, have claimed that processors have been piling up profits at the expense of farmers. "The spread between pork and live pig prices has reached RMB9.55/kg which is a very unfair situation for pig breeders,"​ according to an editorial in Yang Zhu Wang, an industry journal.

The maize-to-feed ratio has fallen below the break-even point of 6:1 and stood at 5.5:1 on 22 January, according to local consultancy Soozhu, which has blamed the rise in pig numbers and killing capacity for the shift. It hasn’t helped that strong demand has pushed up maize prices up 0.3% month-on-month to a current RMB2,352/tonne.

Farmers may have to wait for a fall-off in pig numbers before prices rebound, according to Feng Yonghui, head of Soozhu, who reckons prices are unlikely to recover until the sow population drops from a current 50 million closer to 47 million or 48 million.

Pork consumption has not been helped this winter by an ongoing austerity drive, which has proved a dampener for this year’s festivities to celebrate the New Year – typically a peak period for restaurants hosting lavish banquets for which Chinese officials have become known. Favourite dishes included braised fatty pork. Under new Chinese president Xi Jinping, civil servants have been told to stay home or banquet in office canteens.

Related topics: Meat

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