Rapid price changes observed in the Chinese pork market
Pig prices in the Chinese market have advanced by more than 50% between October 7th and the first week of November. That may trigger another pork imports frenzy, according to a recent commentary from Jim Long, President and CEO of Genesus Inc. "No one pays more than they have to. On October 7th packers paid 11.54 RMB ($1.80) per kilo because they could and producers sold for that. Now in a month, the price for a market hog has increased by $100 per head. We believe we have seen a real indication of fewer hogs coming to market due to disease (ASF, PRRS, PED) and the liquidation of the national herd due to huge financial losses from hogs selling for $150-200 per head below the cost of production," he said.
At the beginning of November, pig prices in China have jumped by 5.5 RMB ($0.86)/kg compared with the previous month. China is expected to increase pork imports for the last two months of 2021, as the demand is growing due to preparations for the Chinese New Year holiday. "We expect China’s increasing hog price will lead to more pork imports. This will support hog prices in North America and Europe in the future. The key will be which slaughter plants are approved for China imports. Many in Europe and Canada delisted. In the USA almost none delisted," observed Mr. Long.
Meantime, pig farms in China are looking for piglets and feeder pugs to restock their inventory. That caused a jump of 150% in prices for 15-kilo pigs, from $40 a few months ago to almost $100. "US pork sales to China in the last two weeks are over 21,000 tonnes. We understand it takes about two months from sale to get pork delivered. The 21,000 tonnes are stronger than the last few months. Pork sales are an indicator of the buyer's thoughts on China's pork supply two months from now. We believe China pork buyers are seeing the big pork supply decrease is here. USDA projected in August a 14% decrease in China pork production in 2022. We believe it will be at least 20%," adder Jim Long.
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