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African swine fever

China pig farmer profits soar as ASF wipes out third of herd

PW ReportersBy PW ReportersAugust 20, 20192 Mins Read
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The Chinese Government is desperate to stabilise Chinese pork prices, which have rocketed on the back of the ASF crisis

Pig breeders in China, who have managed to keep fatal African swine fever off their farms since outbreaks began a year ago, are now set to reap rewards, with some in line for record profits of $200 per pig thanks to soaring prices.

Reuters reported that the virus has reached every province of the world’s top pork producer. The pig herd shrank a third in July from the same month a year ago, according to the Ministry of Agriculture and Rural Affairs, though many observers believe half the herd is already gone.

Since June, slumping production has triggered a price surge. National average hog prices passed the 2016 record of 21 yuan per kilogram earlier this month to hit 24.6 yuan ($3.48) per kg on August 19, according to data from Shanghai JC Intelligence Co Ltd.

Pig prices are typically weak in summer months when pork demand is lower, and start rising in September at the start of the peak season.

“The timing is earlier than expected,” said Pan Chenjun, senior analyst at Rabobank. “August is still the low season but now every day we see an increase in price.”

Last week, processor WH Group reported a 17% decline in first half profits and warned that prices are set to keep climbing.

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