Piglets in China Triple in Price, Surging to Record

(Bloomberg) --

China's piglet prices surged to a record as farms snap up already-tight supplies to rebuild hog herds that were destroyed by African swine fever last year.

Average national piglet prices surged to 126 yuan ($18.11) per kilogram on Thursday, according to Shanghai JC Intelligence. That means a 17-kilogram piglet, the typical weight for the animal when they're sold, would cost more than $300, up from about $97 in 2017, before swine fever broke out in China.

“The record price is because of scarce supplies of piglets,” said Lin Guofa, senior analyst at Bric Agriculture Group, a Beijing-based farm consulting firm. “Farms with good cash flow are all eager to rebuild herds on expectations of fat profits from strong domestic pork prices.”

China's pork prices surged to unprecedented levels after the world's top consumer of the meat got hit with African swine fever in 2018, and have remained high as the country struggled to import more pork from abroad while rebuilding herds at home. The Chinese government has been urging hog farms to restock, offering incentives such as subsidies to expand supplies.

In a rare move, Wens Foodstuffs Group Co. offered financial rewards of 5 yuan per head to employees who are able to source piglets so that the country's top pig breeder can expand its herd.

China's agriculture ministry is confident that the country will be able to recover its domestic hog capacity to normal levels by the end of the year, Yang Zhenhai, the head of the ministry's animal husbandry bureau, said at a press conference on Thursday. That's despite delays in the construction of new pig farms and restocking of herds that have resulted from animal transport interruptions following the coronavirus outbreak, he said.

The government's policy to subsidize loans to smaller pig farms have been popular, and the ministry will continue to encourage bigger farms to support rural household families expand their hog herds, Yang said.

The Chinese government will increase state stockpiles of frozen meat, and loan subsidies will be expanded, Premier Li Keqiang said last month.

To contact Bloomberg News staff for this story: Niu Shuping in Beijing at nshuping@bloomberg.net

To contact the editors responsible for this story: Anna Kitanaka at akitanaka@bloomberg.net, Atul Prakash

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With assistance from Bloomberg