16 August 2023
2 minute read
China's hog breeders have suffered losses for 7 months
Chinese pork processing giant WH Group Ltd expects hog prices in China to rise 10-20% in the second half of 2023 from the first six months, supported by stronger demand and smaller supply glut, reported Reuters.
"Hog breeders in China have suffered from losses for seven months, the longest period in history, due to low hog prices. But the situation will improve in the second half of the year," Ma Xiangjie, President of WH Group's subsidiary Shuanghui Development, told an earnings briefing on Tuesday.
Ma forecast the median hog price to reach about 16 yuan ($2.20) per kilogram (kg) in the second half of this year, up from an average of 15.12 yuan in the first-half, but the average 2023 price would still be significantly lower than 2022.
WH Group on Tuesday reported its first-half profits before biological fair value adjustments slid 45% to $383 million.
January-June revenue at the group, which owns US-based Smithfield Foods, the world's largest pork processor, fell 2% to $13.12 billion, according to a company filing.
China, the world's top pork consumer, saw its pork output in the second quarter hit the highest in at least a decade for the period, as farmers geared up for better demand. However, sluggish prices and tepid demand amid faltering economy prompted breeders to reduce herds, boosting slaughter volumes.
"Pork demand is seasonally stronger in the second half of the year, which will improve the supply and demand situation," Ma said.
At the same time, WH Group expects hog prices in the United States and Europe to fall in the second half of the year from current seasonal high levels. WH Group executives also said that the recent heavy rains and flood in northern China did not affect its production.
($1 = 7.2830 Chinese yuan renminbi)
