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China: Future market fluctuations expected
China's pork market may undergo dramatic fluctuations
next year because of an unstable production situation, said Wang Zhicai, the
Ministry of Agriculture's livestock husbandry division director, at a recent
press conference.
Blue ear aftermath
"Factors that may affect stable pig
production in the
blue ear virus aftermath
have become increasingly apparent. While the pig population's subsequent rapid
increase might lead to a temporary surplus of pork, rising feedstuff and fuel
costs might diminish the industry's profitability. Without the adoption of
proper measures, this might lead to a new wave of market
fluctuations."
The country had endured months of skyrocketing pork prices
following the blue ear virus decimating the country's pig population last year,
and domestic pork prices had almost doubled since last summer because of rising
costs and shrinking supplies. Since then pig numbers have rebounded following
government subsidies, with official statistics indicating a rise to 470 million
pigs in the first half of the year, about 10 above the same period of
2007.
Analysts optimisticMarket analysts are
optimistic about supplies, considering the pork market would be saturated by the
end of the year, with prices highest around Spring Festival before falling again
to a low point in the second half of 2009. They recommend that pig farmers
should decrease the numbers of sows in advance of the festival to prevent
further severe price falls.
The Ministry of Agriculture recently stated
that the pork price has been continuously dropping since January, and prices
have declined 13% on average since then, with the current average price in major
markets around 20 yuan per kg, down about 3 yuan from January. The ministry
added that pig farmers could currently make a profit of 160 yuan per 100 kg on
average, less than half the 400 yuan they earned at the peak season at the end
of 2007.
China normally consumes about 50 million tonnes (MT) of pork
annually but only consumed 42 MT last year due to the sever shortage caused by
the spread of blue ear virus, and will probably be only 46 MT this
year.
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