Chinese government pledges hog capacity control to stabilize prices

Beijing | Reuters — Chinese language authorities have pledged to rein in hog manufacturing and cut back soymeal use in animal feed to stabilize hog costs.

At a Wednesday assembly with main hog producers, the Ministry of Agriculture and Rural Affairs (MARA) stated the nation would scale back the variety of breeding sows, management the slaughter weight of hogs and curb new manufacturing capability.

Why it issues: China is a key export marketplace for Canadian pork.

The transfer comes as authorities ramp up efforts to deal with overcapacity throughout a number of industries – an ongoing problem that has fuelled home deflation and triggered commerce limitations overseas.

“The drop is pushed partially by yesterday’s assembly targeted on controlling hog manufacturing capability, which is predicted to restrict future soymeal consumption,” stated Wan Chengzhi, an analyst at Capital Jingdu Futures.

Rapeseed meal and soybean meal futures fell on Thursday following the information. Rapeseed (canola) meal is usually used as an alternative choice to soybean meal in animal feed.

China’s hog sector continues to grapple with oversupply amid sluggish consumption demand.

Money hog costs have hovered beneath 15 yuan (C$2.86) per kilogram in current weeks, down from round 21 yuan final August, in accordance with consultancy MySteel.

“Slaughterhouses have been actively pushing costs down, and with the present low season in consumption, costs have continued to weaken,” stated Pan Chenjun, a senior animal protein analyst at Rabobank in Hong Kong.

Knowledge confirmed China’s sow herd stood at 40.43 million heads on the finish of June, above the traditional holding degree of 39 million.

Provide is predicted to stay elevated within the second half of the yr, Pan stated.

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