Across The Border | Buoyant hog prices underpinned by China’s high-protein diet shift
Large agricultural companies poised to benefit from boom in pork consumption
China’s rising appetite for pork, especially high-quality pork, is likely to fuel consolidation among the country’s hog producers and meat processing sector, potentially benefiting big players with overseas industrial chains.
China ranks as the world’s largest producer and consumer of pork, home to about half of the world’s domestic bovine population. Much of China’s domestic production comes from small-scale pig famers, who are unable to scale up to meet the surge in demand, leaving them potentially vulnerable to the sweeping changes that lie ahead, according to analysts.
Each year China imports a significant amount of pork to satiate the nation’s growing consumption, driven in part by the shifting dining habits of more affluent consumers.
The impact can be seen in hog prices, which have remained relatively upbeat in spite of the global rout in agricultural and industrial commodities. Since last March, China’s hog prices have increased sharply to hover near a historical high level of 18.72 yuan per kilogram at the end of January, according to data from the Ministry of Agriculture.
Shortages could be on the horizon, as the number of sows ready for production fell for a 27th consecutive month in December, according to government data.