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China: Predictions unstable as pig surplus grows

China's pork market might undergo dramatic fluctuations next year because of a growing pig surplus, a senior agriculture official said Sunday.

Supply easing
The comments by Wang Zhicai, the Ministry of Agriculture's livestock husbandry division director, came at a time when the tight pork supply is easing after weathering months of skyrocketing prices following the blue ear outbreak in the pig population last year.

While the pig population's rapid increase might lead to surplus pork supplies, rising feedstuff costs might diminish the industry's profitability. Without the adoption of proper measures, this might lead to a new wave of market fluctuations," Wang said.

China's pork prices had almost doubled since last summer because of rising costs, shrinking supplies and blue ear's spread. But the country's pig supply levels have rebounded through government subsidies, lowering pork prices.

Industry statistics show there were about 470 million pigs in the first half of the year, about a 10 percent increase over the same period of 2007.

Market saturated
Beijing-based market analyst Yi Mingqi believed the pork market would be saturated by the end of the year. Yi predicted prices would spike around Spring Festival before hitting a low point in the second season of 2009.

The ministry said pig farmers could currently make a profit of 160 yuan per 100 kg on average - less than half the 400 yuan they could earn at the peak season at the end of 2007.

China consumes an average of about 50 million tons of pork annually but only consumed 42 million tons last year due to the shortage. The figure is expected to be 46 million this year.

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