China calls for pig production to be maintained amid sharp drop in prices

On Wednesday, June 16, China’s state economic planning agency urged the country’s pig producers to keep production capacity at a reasonable level, after a cost indicator widely tracked by the industry hit a level that makes the business unprofitable.

The average ratio between hog and grain prices fell below 6:1 last week, according to the National Development and Reform Commission (NDRC), which added that it issued a Level 3 warning for an excessive decline in live pig prices.

NDRC’s pricing division “will closely monitor pig production and market price trends, conduct stock adjustments appropriately, and promote the smooth functioning of the live pig market,” the entity said in a statement.

Live pig prices have plunged more than 60% since the beginning of the year and currently operate at an average of 14.68 yuan ($2.29) per kg, the lowest level in two years, according to Shanghai JC Intelligence.

The sharp decline took the market by surprise, having come even before the Chinese herd fully recovered the levels seen before the African swine fever outbreak that began in 2018.

Source: Money Times

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