BEIJING/SINGAPORE (Reuters) — An exodus of small pig farmers in China is prolonging an industry downturn that will see the country challenge Japan as the top importer this year for the first time.
Millions of small farmers quit the industry last year despite a recent surge in pork prices. The move came after two years of low prices and the introduction of tough new environmental rules.
Their exit has reduced the number of breeding sows and curbed China’s ability to quickly rebuild its herd.
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Chinese imports may top one million tonnes for the first time this year, which is up 28 percent from 777,000 tonnes last year.
China also imports roughly the same amount of snouts, ears and trotters, which are considered delicacies.
The surge will benefit farmers in major exporting countries such as Germany, the United States and Brazil.
“We are not expanding. We have lost all our money. Some of our members plan to quit breeding after they get their money back from the high price,” said Zhao Xuyou, a small hog farmer with a swine co-operative in the northern province of Shandong.
“It is not a business for our size. It is a business for big players.”
China’s pork industry regularly experiences boom-and-bust periods, and smallholder farmers are traditionally quick to respond to price changes, such as a rebound in pork prices late last year.
However, herd rebuilding will be held back this time by a steep fall in the number of breeding sows after five million mainly small pig farms closed last year.
Analysts said the current round of restocking could take another year, keeping pork prices high and boosting imports.
Chinese hog farmers have been hit by new environmental rules that are forcing farms to move away from urban centres and implement costly systems to manage waste products.
The number of breeding sows fell in February for a 30th month in a row in February to 37.6 million, a record low and down 7.9 percent from last year.
The agriculture ministry said the slaughtering of breeding sows was continuing after breeders lost $20 per head in 2014 and 2015 after breaking even in 2012 and 2013.
“Hog farms are eager to restock, but piglet supplies are in shortage following the reduction in the numbers of breeding sows,” said Xiong Kuan, an analyst with Beijing Orient Agri-business Consultant Co. Ltd.
An outbreak of disease earlier this year also reduced pig supplies, he said.
Prices for a 30 kilogram piglet have more than doubled from a year ago to a record $200 per tonne, which is deterring farmers from aggressive restocking, said Pan Chenjun, a livestock analyst with Rabobank in Hong Kong.
