China Sees Fewer Hogs, Higher Pork Prices on African Swine Fever
(Bloomberg) -- China, the world’s top pork producer and consumer, may see hog herds shrink in the second half of the year as farmers are unwilling to restock because of African swine fever, and that’s likely to push up prices of the staple, according to an Agriculture Ministry official.
The number of breeding sows dropped more than 5 percent for a third straight month, signaling that there’ll be fewer hogs in the market, Tang Ke, head of the market and information department of the Ministry of Agriculture & Rural Affairs, said at a press conference on Wednesday.
“We advise farms to increase breeding on condition they have good control over outbreaks of African swine fever,” said Tang. Risks from outbreaks have prompted farms to increase slaughtering, which weighed on domestic pork prices in the past two months, normally the peak consumption season, according to Tang. Sales slumped more than 14 percent on year in some markets, showing weak pork demand, he said.
Notwithstanding the impact on feed consumption from African swine fever, the country’s demand for corn is set to exceed supply in 2018-19 with increased usage in the starch and sweetener industries. While sales from state reserves were higher than expected in 2018 at more than 100 million metric tons, this round of destocking may end this year and inventories are likely to return to normal by the end of the marketing year, Tang said. Farmers could increase corn acreage with domestic prices expected to rise steadily, he said.
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