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China hog inventory down 41% from last October

Sow herd rises 0.6% from prior month, signaling recovery may be underway.

China’s hog sector may be on the road to recovery, newly released government data suggest. China’s Ministry of Agriculture & Rural Affairs (MARA) reported Nov. 29 that the country’s sow inventory rose 0.6% from September to October. Still, the country's hog inventory levels were down 41.4% in October compared to October 2018 as the result of the continued spread of African swine fever (ASF).

Even with a slight rise in the sow inventory, a survey of hog farms in 400 counties showed that the sow inventory was still 37.8% lower in October than the same period last year.

The September data showed that the total hog inventory was down 41.1% and that sow numbers were down 38.9%.

Rabobank estimates that ASF has led to a 55% loss in China’s hog herd.

The bank also has reported that retail pork prices rose 78% from September to October, as inventories were depleted following the surge in pork demand associated with fall holidays.

“Slow herd replenishment, particularly in ASF-affected regions, is contributing to the near-term shortfall and resulting increase in pork prices,” Rabobank noted, adding that pork consumption has suffered as high prices limit interest.

Rabobank expects a rebound in production to occur at the beginning in 2021.

INTL FCStone has predicted that it will take five to seven years for the Chinese pork industry to completely recover.

“Some analysts say it will take 10 years, and there are others who say three years,” said Arlan Suderman, chief commodities economist for INTL FCStone Financial Inc. “There are so many variables, such as when researchers can develop a vaccine. That would certainly impact the recovery, but one way or another, it’s going to take time.”

TAGS: Business
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