It seems stock prices of China’s leading Pork Producing companies are soaring as ASF continues to disrupt the pork business. Bloomberg just announced that Muyuan Foodstuff Company is now the best performing stock on the MSCI Asia Pacific Index this year. Stock prices of many of these companies have been climbing by the 10 percent daily limit lately and closing at record highs.
Expectations of higher pork prices due to the reduction of herds in affected areas and lower supply are driving the surge. The government is pledging its support to companies like Muyuan who are planning to invest in new slaughtering facilities. These new government policies are aimed at reducing the negative impact of restrictions upon transportation of live animals. Again we applaud Beijing and the support of the government upon this important Industry.
CURRENT PIG PRICE IN CHINA
No doubt the effect of ASF and the resulting increased numbers of animals going to slaughter has many slaughterhouses running at full capacity. Thus, as result we see lower prices in virtually every market region since the first of the year. For example, the market price in Shanghai is now $0.88/lb., down from $1.01/lb. Pig prices in Fujian Province are $1.08/lb., down from $1.32/lb., just 60 days ago.
It appears the variation of pig prices within regional markets is now beginning to stabilize as we don’t see the huge swings in price we once did. For example, we noted pig prices back in January in Sichuan Province varying from $1.15/lb., to $1.48/lb. Today prices range from $0.93/lb., to $0.96/lb. We now see similar reductions in the range of pig prices in the other major regions of China as well.
No doubt much higher pig prices (perhaps even all-time highs) are on the horizon for producers in China as result of these conditions. We wish our friends, colleagues and clients all the best as they deal with these issues.