China third-quarter pork output jumps 18% year-on-year but supplies still tight

BEIJING (Reuters) - China’s third-quarter pork production rose 18% from a year earlier to 8.4 million tonnes, according to Reuters calculations based on official data, pointing to the first signs of recovery in the world’s top producer.

FILE PHOTO: A vendor wearing a face mask following the coronavirus disease (COVID-19) outbreak is seen at a pork stall at a market in Hong Kong, China July 20, 2020. REUTERS/Lam Yik

It was the first quarter since July-September of 2018 to show a year-on-year increase in pork output, after an epidemic of African swine fever swept through the country’s hog herd, causing production to plunge.

The incurable disease hit China’s pig farms in August 2018, and reduced the breeding stock by an estimated 60% by late last year.

Pork output fell to a 16-year low of 42.6 million tonnes in 2019, and was expected to contract by another 20% this year, according to Rabobank.

But production in the first nine months of 2020 has only dropped 10.8% from a year earlier to 28.38 million tonnes, the National Bureau of Statistics said on Monday.

“That’s higher than expected,” said Pan Chenjun, senior analyst at Rabobank, referring to the amount of pork produced.

“Given that pork prices are still much higher than they were pre-ASF, I would expect a larger drop.”

The large rise in the third quarter was helped by an especially weak comparative quarter in 2019, when output fell 42% on year to just 7 million tonnes, as the worst impact of swine fever became clear.

Other analysts also questioned the data showing the number of breeding sows had increased 28% to 38.22 million heads, close to levels prior to swine fever.

The number of pigs slaughtered fell 11.7% in the first nine months to 361.86 million, the data also showed.

But Xiong Kuan, an analyst at Cofco Futures, said in a note last week that less than 24 million pigs would be slaughtered this month, an 8% rise on September, but still far short of the typical monthly requirement of 45 million, he said.

Beef and lamb output have also contracted in the nine months, by 1.7% and 1.8%, respectively, the data showed, although poultry output, a cheaper substitute for pork, grew by 6.5%.

Reporting by Dominique Patton; Editing by Ana Nicolaci da Costa and Jacqueline Wong