China agriculture minister urges pig breeders to reduce capacity as prices fall

BEIJING – China's Agriculture Minister Han Jun urged the hogs industry to meet production-capacity reduction targets and scale the breeding sow herd to a reasonable level, the ministry said late on Friday (April 17), as hog prices languished at low levels.

Han met with industry representatives with a message to coordinate the advancement of capacity regulation and upgrade the industry to reduce cyclical volatility.

Home to half the world's pigs, China's massive hog sector is struggling with overcapacity and weak consumer demand.

Pig prices are hovering at a low level due to high production capacity and an inertia-driven increase in market supply, the statement said citing experts at the meeting.

The most-active live hog futures contract on the Dalian Commodity Exchange touched its lowest level since the inception of the futures in January 2021 at 9,000 yuan (S$1,680) per metric ton on April 13.

Prices then climbed to their strongest since March 9 at 11,295 yuan per ton on April 17, supported by concerns over potentially reduced supply due to the outbreak of foot-and-mouth disease in the northwest region.

"Leading enterprises must take the lead in implementing capacity reduction requirements and refrain from reckless expansion," the statement said.

The meeting called for the need to accelerate the culling of low-yielding, aging sows and weak piglets as they seek tighter policies to control production capacity.

The industry will also promote independent innovation in breeding, vigorously promote low-protein diet technology, and continuously improve the level of breeding standardisation and intelligence, the ministry said.

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