21.
08.18
08:29

China's pigmucks are working uneconomically

Most of the newly expanded pig farms in China are working uneconomically because production costs are rising. In addition, one of China's largest pig feed producers has reported the first loss in years. Yesterday, the Beijing-based Dabeinong Technology company said in an annual accounts press conference. Blame for the misery are also rising costs for feed commodities such as soybean meal.
This commentary shows the condition of China's pig industry. The pig herds grew too fast in recent years and the males produced too much pork at a time when demand was stagnating.
The report does not say a word about the escalated trade dispute between the US and China. In the race for import duties, China increased import duties by 25%, which had a direct impact on domestic prices.
Soybean meal prices reached a record high in April as the trade dispute escalated. Last week, prices were just 1 yuan below the peak.
In Q2 / 2018, the company reported a pre-tax loss of 76.9 million yuan. In comparison, a profit of 227.4 million yuan was taxed in Q2 / 2017.
The balance sheet does not yet include the period in which China's first case of African swine fever (ASF) occurred. Meanwhile, three ASF cases have become known and stock prices of the major pigmeat groups have already lost 10%.

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