Pork prices decline as market nears balance
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E-mail China Daily, March 19, 2022
Pork prices in China will continue declining next month, but at a slower pace than before due to the stockpiling of frozen pork, an analyst said on Thursday.
Zhu Zengyong, chief pork industry analyst at the Ministry of Agriculture and Rural Affairs, said the pork market is expected to reach a balance of supply and demand sometime between the second half of this year and early next year.
Last week, the average purchase price of live pigs was 13.84 yuan ($2.21) per kilogram, a year-on-year decrease of 53.2% and down 1.7% from the previous month, according to the ministry.
"The average price of pork is about 23.13 yuan per kg, while the highest in recent years hit 59.64 yuan in February 2020," said Zhu, who is also a researcher at the Chinese Academy of Agricultural Sciences.
The current oversupply of pork has been caused by higher production and declining demand after the Spring Festival, he added.
Chen Guanghua, deputy director of the ministry's animal husbandry and veterinary services bureau, said the live hog stock was 449 million by the end of last year, a year-on-year increase of 10.5%.
"These hogs will be slaughtered gradually from January to June this year, so the supply in the first half of this year will be at a high level,"Chen said.
China fully recovered its hog production capacity in the second quarter of last year, rebuilding the live pig stock that was seriously affected by the African swine fever in 2018.
On Wednesday, the National Development and Reform Commission announced this year's third round of purchasing and stockpiling frozen pork.
It said that if necessary, the stockpile will be strengthened to help prices of live hogs recover to a reasonable level and ensure a stable market.
"The capacity of sows is generally reasonable and the hog price is already at a low level. It's not very possible to have another dramatic decline," it said.
Stockpiling has begun in provincial-level regions, including Beijing, Jiangxi, Hubei and Chongqing, and other areas will start soon, according to the commission.
The first two rounds, which led to a stockpile of 78,000 tons of frozen pork, have temporarily adjusted the supply structure, Zhu said.
"The stockpiling will prevent breeders from selling off live pigs," he said.
The commission started the stockpiling amid the onset of swine fever. In recent years, about 100,000 to 200,000 tons of frozen pork were stockpiled in two rounds each year, Zhu said.
