China pork prices could rise 70 per cent this year, with millions of animals facing cull
- Expected rise in pork prices boosts shares of Chinese meat processing companies
- African Swine Fever could lead to consolidation in industry, says Rabobank
Pork prices in mainland China may rise by more than 70 per cent year on year to record levels in the second half of 2019 following a drop in hog supplies, Tang Ke, a department director at China’s ministry of agriculture and rural affairs, said on Wednesday.
Chinese farmers have had to cull their pig populations to combat an outbreak of African Swine Fever that began in August last year.
Meanwhile, the share prices of large meat processors in the country have risen thanks to optimism that higher prices will boost their bottom lines, according to Bloomberg analysis.
Shenzhen-listed meat processor Wen’s Foodstuff Group reported a rise in its shares, from 37.93 yuan to 40.39 yuan, on Wednesday. In August 2018, Wen’s shares were trading at 20 yuan a share. Muyuan Foodstuffs, a pig breeding company also listed in Shenzhen, reported a 3 per cent rise in its shares on Wednesday, from 67.21 yuan to 69.25 yuan. Shares in Muyuan have climbed steadily from a low of 22 yuan a share in August last year.
There is no vaccine for African Swine Fever, which has hit smaller pig frams hard and could push the industry towards consolidation, according to a report by Dutch agricultural financing bank Rabobank.