The Chinese have enough pigs for the Spring Festival

 After a long and sharp fall, slaughter pig prices in CHINA are up nearly 70 percent from a low in early October to last week; however, they are still far behind the levels of a year ago. The recent spike in prices raised hopes among global exporters that losses suffered by producers during a period of low prices have led to a reduction in domestic supply and an increase in China 's import demand for pork.

But Xin Guochang, DIRECTOR of the animal husbandry bureau of the Beijing Ministry of Agriculture, takes a different view. Speaking recently to state broadcaster CCTV, he noted that China's pork consumption in the first three quarters of 2021 rose 38 percent year-over-year to 39.2 million tons. He said 30.2 million pigs were sent for slaughter in October, up 5.1 million from September and 111 percent more than last year.

Guochang said there were 43.5 million sows in China at the end of October, above the target of 41 million HEAD, up 6.6 percent from October 2020 levels. According to the expert, the number of piglets born in June and July this year increased by 39 percent and 33 percent compared to the same period last year, respectively, and they will be available as pigs for slaughter during peak demand in early February 2022. "The total number of pigs and pork will be sufficient to supply the market for the Spring Festival," Guochang stressed. While fluctuations in pork prices cannot be ruled out, he said he does not expect a significant increase before the holiday season.

According to a national study, the average price of slaughtered pigs per kilogram of live weight in China on December 1, 2021 was 17.78 yuan. This is equivalent to 2.47 euros. At the beginning of October, it was still 10.56 yuan per kilogram (1.47 euros) due to the large volume of slaughtered pigs, but exactly a year ago it was 32.20 yuan per kilogram (4.47 euros). Analysts attribute the rise in prices in recent weeks to a lesser extent to a reduction in supply, although not many heavy pigs have been sent for slaughter recently, and a reduction in pork imports has affected the market.

The main reason for the price increase was the seasonal increase in demand in autumn, as the production of traditional sausages for the Spring Festival has already begun. Some analysts in China believe that the price of slaughter pigs could rise to levels above 20 Chinese yuan (2.78 euros), especially since piglet prices have also been rising steadily since mid-October.

However, there is currently no indication of this when trading live pig futures on the Dalian Commodity Exchange (DCE). The settlement price for January futures was 16.22 yuan per kilogram (2.25 euros) on December 1, 2021 and 15.34 yuan per kilogram (2.23 euros) maturing in May 2022. Another argument against stronger price increases is the large stocks of pork kept in government warehouses. In addition, Gochan noted that consumers are also increasingly consuming poultry, beef and lamb, and that the share of pork in total MEAT consumption is declining. He even warned against an excessive increase in pork production due to recent price increases. Analysts believe that at current pork prices, the sector will easily break even again.

The Spring Festival marks the New Year in the People's Republic of China. It lasts six days and will be celebrated in 2022 from 1 to 6 February.