BEIJING, Oct 18 (Reuters) – China’s third-quarter pork production surged to its highest in three years, official data showed on Monday, after producers built thousands of large breeding farms last year to rebuild a hog herd decimated by African swine fever.
Pork output for July-September was 12.02 million tonnes, up 43 percent compared with a year earlier, according to Reuters’ calculations based on official data, and the highest since the third quarter of 2018, before China began feeling the fallout of the swine fever epidemic.
China’s pork output jumped 38 percent in the first three quarters of 2021 versus a year earlier to 39.17 million tonnes, the statistics bureau said.
The third quarter was, however, lower than the 13.46 million tonnes in the second quarter, defying expectations by some analysts.
“I thought it would be larger than the Q2 because there were a lot of liquidations in Q3,” said Pan Chenjun, senior analyst at Rabobank.
The surge in pork production was led by the largest producers who invested billions of yuan in new farms during 2020 in a bid to grab market share in the aftermath of the swine fever epidemic.
But prices have plunged 65 percent so far this year, prompting some farmers to sell their herds and exit, while others took the opportunity to get rid of less productive sows.
China’s sow herd contracted by 0.5 percent in July compared with June, and by another 0.9 percent in August versus the month prior, according to data previously published by the Ministry of Agriculture and Rural Affairs.
“In the second quarter many small producers still had hope (that prices would recover). But by the third quarter the losses had gone on long enough for them to stop, they had no cashflow,” added Pan.
Some were losing as much as CDN$193.50 per head last month, she added, when live hog prices fell to under CDN$2.13 per kilogram. Prices are currently at CDN$2.53.
Prices are also under pressure from huge imports this year, although they have slowed considerably in the last month, with September arrivals at 210,000 tonnes, down 44.8 percent from the previous year, and the lowest in 23 months, according to customs data.
China brought in 3.14 million tonnes of pork in the first nine months of the year, down 4.3 percent from the same period a year earlier, customs data also released on Monday showed.
The statistics bureau said China’s pig herd contracted to 437.64 million heads at end-September from 439.11 million heads at the end of June.
China slaughtered 491.93 million hogs in the first nine months of the year, up 35.9 percent from a year earlier, it added.