February 7, 2018 / 10:51 AM / 2 years ago

China pig prices plunge even as nation gears up to feast on favourite meat

BEIJING, Feb 7 (Reuters) - Pig prices in China are falling ahead of the Lunar New Year holiday that is the nation’s peak pork eating period, underlining concerns about plentiful supplies in the world’s top producer.

The average price paid by large slaughterhouses for pigs has dropped by about 10 percent in the last month to 13.67 yuan ($2.18) per kg, according to industry website Soozhu.com. That is down from 17.26 yuan per kg a year ago.

The price drop bucks the seasonal trend of prices rising ahead of the Lunar New Year holiday, when hundreds of millions of Chinese gather with family for meals that include pork dishes. The week-long holiday will begin on Feb. 15.

Prices typically peak for the year ahead of the holiday and farmers want to sell hogs now in expectation that prices will likely only fall from this point, according to analysts.

“People want to liquidate their herd before Chinese New Year while prices are high,” said Pan Chenjun, a director at Rabobank, referring to small- and medium-sized farms.

China is expected to slaughter 696 million pigs this year, said Yao Guilin, an analyst with China-America Commodity Data Analytics, an increase of about 1 percent from last year.

That is up from a 0.5 percent increase last year, she said, thanks to large farming companies who are expanding rapidly to capture market share.

Previously, hog herds had declined in China amid low prices that led farmers to cull their stock.

$1 = 6.2600 Chinese yuan renminbi Reporting by Dominique Patton Editing by Christian Schmollinger

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