One of China's biggest pig breeders relayed his confidence that the country's hog production industry would recover and revert to normal levels by next year.
China's biggest pig breeders New Hope Group chairman Liu Yonghao manifested his positivity towards the hog industry in the country. He claimed that hog production would recover and revert to normal levels by the end of 2021.
He said that pork prices may remain relatively high in 2020, but they are expected to fall below production costs in the next years. He revealed that new players are entering the market and see farming as a better business alternative.
He also said that his company's breeding counterpart New Hope Liuhe was positioned correctly to avoid the adverse effects of the African Swine Flu to the market. Liu noted that prices in the industry remain low as production costs increase. At present, the costs are at 11 yuan per kilogram for some of its farms.
To curb the losses of the pig market, the Chinese government offered pig farmers incentives for them to restart their operations and cope with the heavy financial burdens. The easement was also to promote the faster recovery of the industry from the pandemic effects.
In 2019, the company sold 3.6 million hogs. It also plans to produce 15 million by the end of 2021 and increase production to 25 million by 2022. The production increase would mean that the company will slaughter eight million pigs per year.
Liu also discussed that pig prices have been experiencing a steady decline since February. He also noted that the trend would continue by the end of 2020 since the market is pressured to increase production. He said that there has been a rising demand for hog imports from China.
At present, China's favorite meat is pork. Retail prices have been at 60 yuan per kilogram in February and subsequently increased during February this year. The increase was said to be caused by the closure of several slaughterhouses. The measure was in compliance with production restrictions due to the pandemic.
Live hog prices, on the other hand, have become 30 percent cheaper in the last three months. Last week, the price went below 30 yuan per kilogram threshold for the first time since October.
The pigs were weighed heavier than usual when processors ceased operations last February and March. Weak consumption also affected the prices when several establishments remained close during the spread of the coronavirus pandemic. The event caused the slowing of China's economy, thereby mitigating the purchasing power of hog buyers.
