The Chinese pork market in four more charts

Wednesday, 10 November 2021

UK pig producers continue to face extremely challenging financial circumstances. Hope remains that the Chinese market will start to import more pork again, however, the signs are that it could be some time before that happens.

Wholesale pork prices in China are weak, but may now be rising again

Chinese wholesale pork prices have been picking up in recent weeks. Nonetheless, reports suggest that there could be a significant amount of frozen pork in strategic storage. This could potentially be used to cap future price rises, perhaps even around New Year.

Live pig prices in China are still weak in historic terms

Live sow and piglet prices are also creeping up. However, they remain depressed in historic terms, and reports indicate that producer profitability in China is suffering.

Chinese pork imports have fallen markedly in recent months

Another current feature of the global market is falling US pig prices. If they continue to drop, this will further increase the competitiveness of US pork against exports from the UK and EU. This would be detrimental, should import demand pick up from the Chinese market. EU prices are already weak. Prices in the UK are also responding to domestic and European market conditions, as well as the logistical situation where processors are unable to take all the slaughter-ready pigs available on farm.

US pig prices are falling, and now cheaper than UK and EU prices

According to the National Pig Association, UK producers are reducing the number of breeding sows by more than 25,000 head (out of a national population of around 400,000 sows). This would mean that the number of finished pigs available starts to decline, although any impact may not be seen until we are comfortably into 2022.

High feed costs and falling pig prices are set to challenge profitability here for some time. We hope to be able to publish GB cost of production estimates for Q3 2021 in the next couple of weeks.

 

Image of staff member Duncan Wyatt

Duncan Wyatt

Lead Analyst - Red Meat

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