Pork price caught in the grip of the Chinese government

The Chinese import tariffs on European pork have significantly disrupted the market. China's measures are under the guise of a retaliatory action against European tariffs on Chinese electric cars, but it appears that the Asian country is mainly trying to combat deflation. Whatever the case may be, the market here must suffer. The DCA Beursprijs 2.0 is moving downward. The import tariffs imposed by China are part of a series of measures to protect its own pork market. In August, it became known that they want to further reduce the sow herd. This is a process that started in 2023 but is progressing slowly. At that time, China had 41 million sows. Initially, the decline was rapid: the sow herd decreased to 40 million. After that, the decline stalled, and now the number stands at 40.43 million. Deflation in ChinaThe ample supply comes at an inconvenient time as the country is in the midst of an economic crisis. This affects the disposable income of the Chinese and thus the demand for pork. For a year now, pork prices have been under considerable pressure. The average Chinese pork price has fallen by about 30% since last summer. This contributes to deflation in the country. The Chinese government would like to reverse this quickly, as it hinders the recovery of the economy. Pork accounts for 13% in the Chinese consumer price index. Bloomberg reports that the Chinese government has summoned the 25 largest pig integrations next week to discuss the surplus situation. The goal is to coordinate cuts in pork production so that meat supply shrinks further. By heavily taxing imports from Europe at the same time, the pork market may be able to relax. Presenting this as a retaliatory action against European tariffs on electric cars seems to primarily serve as a convenient excuse to have a legitimate reason. Pork prices plummetingFor the European pork market, the tariffs are a significant dampener. In many countries, prices are falling, including the Netherlands, Denmark, and Belgium. Spanish prices have been declining for some time. The German market managed to remain stable this week, but there too, a correction looms. Although Germany cannot export meat to China due to African swine fever, they still feel the price pressure that has developed in the European meat market. The Dutch pork supply is limited, but at this moment, it cannot provide any counter-pressure. The 266,029 slaughtered pigs from last week are well below the long-term average, although the difference with 2024 is limited. DCA BeursprijsAfter a long period of stability, the DCA Beursprijs, based on the submissions, is now moving downwards. The price for slaughtered pigs decreases by €0.06 to €1.87 per kilo. The price of live pigs drops by €0.04 to €1.46 per kilo.