China halted pork purchases and price received by Argentinian producers collapsed by 40%

China’s decision to stop importing pork has worried local producers and exporters of pork, where shipments scheduled for the next few months are on hold. In addition, in recent weeks, there has been a drop of up to 40% in prices posted by the Chinese market, which today suffers from a seasonal decline in demand and also from excess production which must be put back on the market, a fact that depresses domestic values.

Guillermo Proietto, managing director of exports of ArgenPork, confirmed the fact in dialogue with Infobae and said that the pork market in the world order is now living “a very delicate moment” because of what is happening on the main pork demand market, such as China, and your decision to restrict the purchase of pork from overseas.

The fall in prices suffered by the values ​​of pork in the Chinese domestic market, a fact not recorded in meats such as beef or poultry, would mean that the Chinese state would have to come out soon to acquire up to 20 000 tons of its small and medium producers to perpetuate the values ​​of pork, which continue to be depressed by the large stock offered by the Asian giant.

According to Proietto, “we have had a drop in pork prices of around 40% compared to the values ​​that were paid four months ago. Today China, at the prices that one could buy this type of meat, could not pay more than $ 90 per pig while on average the price of the live hovers around $ 120 to $ 125. Thus, the cost of the producer is lower than the cost of production. And this is happening in many countries, not just Argentina.”.

For this reason, and attentive to what is currently happening in China, and to its decision to stop the importation of pork, the specialist of ArgenPork commented that “the market hits and goes to the extreme: we have to wait that it settles. Major exporters are now diverting their production to other markets, but as China saturates, this also affects other Asian markets, such as Hong Kong and other countries in Africa and Eastern Europe. .”.

Impact

The delicate situation that China is experiencing today with regard to its pig production is linked to the great effort made in recent months to increase the number of pigs after the death of a large part of its herds due to African swine fever.. There are also other factors, such as the need for their small producers to allocate a large part of their production to the domestic market, which they cannot keep on their farms.

This situation has caused an oversupply of this product in the Chinese market, just as the demand for this type of animal protein by the Chinese consumer is falling seasonally. As we have learned, the Chinese government’s decision is to force the purchase of up to 20,000 tonnes of pork to support domestic prices.

In the case of the Argentinian market, China’s decision to stop buying will lead to increased stocks in local refrigerators, they will have to freeze some of those lots and the sausage industry – which has no longer shown a high activity due to the pandemic – is now also expected to increase its stock of pulp destined for Southeast Asia.

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