Chinese pig prices at 15-year low

The Chinese pig price has reached its lowest point in as much as 15 years. Chinese pig farmers are seeing their losses rise further as weak domestic demand for pork coincides with rising costs due to the war in Iran. Once again, Chinese pig farmers have come under further pressure. Economic growth in China is faltering and households have been spending less money in recent years on the traditionally very popular pork. The expectation is that the tide will now turn. It is likely that pig farmers will order fewer piglets and at the same time it is expected that quite a few, especially smaller, farmers will stop. Failing policy For more than two and a half years, the Chinese government has been trying to reduce the sow herd from 41 million sows to 39 million sows. So far, this has not been going smoothly. At the time of writing, 24 March, the sow herd stands at 39.61 million sows. Pig farmers in the country have however not adjusted their production sufficiently, resulting in a surplus of breeding sows. In addition, the costs of feeding the large pig herd threaten to rise, now that global agricultural markets are under pressure from disruptions in the supply of energy and fertiliser from the Middle East. Lowest point in 15 years Due to the malaise, the pig price has reached its lowest level in 15 years. Converted, this amounts to a level of €1.60 per kilo. This price may seem not too dramatic, especially if you keep in mind that these are prices for live pigs at livestock markets. For the Chinese market, however, this price is exceptionally low. Due in part to dependence on imports of feed, pig prices in China are structurally a lot higher than we are used to in the Netherlands. As a result of the situation, pig farmers have been in the red for months, but since a recent holiday period, traditionally a period of strong demand, the situation has quickly worsened. Breeders are now losing more than 400 yuan (around 58 dollars) per animal, an unsustainable level that is further fueling pessimism in the sector, according to market research agency Mysteel.