Pig prices in China fell below US prices

The current price of live pigs in CHINA has fallen to 15 yuan/kg ( US $2.34 ) due to a combination of more pigs, larger market pigs, huge imports of frozen pork, liquidation of cold stores and panic selling by farmers. This is the first time Chinese hog prices have been lower than the US market, according to Jim Huang, HEAD of the futures market, and this could signal a reduction in imports in the coming months.

“In my opinion, the downward trend in prices for four months in a row is due to the improvement in the supply of pigs and the low demand for pork. This corresponds to the late stage of the hog price cycle. The price of pigs will continue to fall until pork demand recovers in September. With a negative spread between Chinese and US pork prices, China is likely to cut frozen pork imports in the second half of the year,” the expert told Swineweb.

China Customs currently imposes an 8% import duty and 9% VAT on frozen pork, but US pork is subject to special duties. At the height of the trade war, the import duty was increased to 72%. With the signing of the US-China Phase 1 Trade Agreement in January 2020, import duty has now been reduced to 33% plus 9% VAT. "The headwind for US pork exports is no longer unpredictable government policies, but purely economic forces," Huang said.