As the Chinese New Year approaches on February 10, the demand for meat is slow to pick up, dampening the spirits of the livestock market. Abundant live pig supplies have caused a further drop in slaughter pig prices at the beginning of the year, leaving pork producers unable to cover their production costs. The oversupply is also increasingly affecting China’s import demand for pork, as reported by Agra Europe.
Slaughter Pig Prices in China at €1.76
The current meat demand among the Chinese population is subdued, leading market analysts to predict a continued decline in slaughter pig prices due to the surplus of live pigs. In the second week of January, the national average prices fell below 14 Chinese Yuan (€1.79) per kilogram of live weight, reaching 13.80 CNY/kg (€1.76) according to the national survey on Tuesday (January 9). This represents a nearly 10% decrease from the already modest levels seen in early January 2023.
Production Costs Not Covered
Currently, slaughter pigs in China are fetching barely more than in Spain or Germany. In previous years, the animals in the People’s Republic were paid significantly higher prices. Private pig farmers, and even large commercial enterprises in China, continue to incur losses as the pig prices fail to cover their production costs. According to calculations from the Beijing agricultural department in November 2023, losses for smaller farms amounted to around €18 per fattening pig, while losses for publicly listed major corporations were lower per animal.
Declining Sow Inventory
China’s sow inventory has continued to decline, according to the Ministry of Agriculture. The latest available data in November 2023 showed a total of 41.58 million sows, which is 2.3 million or 5.2% less than the previous year. Despite the ongoing decline in sow numbers, the pig supply has not diminished as the productivity of mother pigs has noticeably increased, and the expansion of the breeding sow inventory until November 2022 continues to have an impact.
Sharp Increase in Pig Slaughter
The Ministry of Agriculture reported a significant increase in pig slaughters from January to November 2023, with a total of 303.9 million pigs processed by slaughter companies handling over 20,000 animals annually. This represents a 19.4% increase compared to the same period the previous year. The surplus is also curbing China’s import demand for pork, which decreased by 6.3% to 1.46 million tons from January to November 2023, after initially increasing in the early months of the past year.