In March 2022, Chinese pork prices reached CNY 17.7/kg, their lowest level since May 2018. However in June, pork prices rose steadily and marked a CNY 22.2/kg value, up 7% month-on-month (m-o-m) and an increase of 25.3% on the previous quarter.
The decline in the number of breeding sows is the primary driver of pork price recovery in the Chinese market. The farmers culled their pigs (along with breeding sows) in the first nine months of 2021 over concerns of the African Swine Fever (ASF) and the rising cost of production. This led to a drop in breeding herd size affecting market supplies in the second quarter of 2022. In the last few months, the Chinese government purchases of pork for State Reserves have also added upward pressure to pig and pork prices. In addition, demand from the foodservice and retail sectors gained momentum in June, along with the easing of COVID-19-related restrictions in China.
Mintec expects China’s pork prices to continue to rise in the second half of 2022, driven by tight supply and increasing demand. High pig feed costs such as soybean meal and corn may make it more challenging for farmers to increase/rebuild their herds. The rising pork prices in China may also contribute to inflation as pork forms a vital part of the Chinese consumer basket.