Pig Prices Jump in China Even as Lockdowns Restrain Demand
· Sow herd has shrunk over 9% from its peak: Everbright Futures
· Lockdowns, dietary shift toward poultry to cap hog price gains
By Alfred Cang, Bloomberg
May 8, 2022
China’s hog prices are rebounding after a prolonged slump, but it’s probably too early to call it a turning point as demand in the world’s biggest pork consumer faces constraints, including from Covid lockdowns.
Futures on the Dalian Commodity Exchange jumped almost 4% on Monday to their highest close since July for the rolling, most-active contract. Still, prices are down 23% over the past year because of aggressive expansion of the herds after the industry was ravaged by African swine fever.
The sow herd has now shrunk more than 9% since its peak but remains slightly above normal levels, according to Everbright Futures. Meanwhile, prospects for demand look dimmer because of Covid lockdowns and a dietary shift toward poultry meat, which will limit hog price gains, the Chinese brokerage said.
“After supply returns to normal levels, demand factors will determine pig prices in the second half of the year,” Everbright Futures said.
China’s hog breeders have been squeezed by rising costs of animal feed ingredients such as soybean meal and corn, as well as the slump in pork prices…
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