Falling pork prices in China, resulting from a better-than-expected recovery of hog production, may further curb China's demand for pig meal, which is mainly made of soybeans from countries like the US, according to analysts.
China's hog price has been declining for more than 20 weeks, plunging by 50 percent from the same period last year, according to a CCTV report on Wednesday.
The National Development and Reform Commission (NDRC) issued a warning about an "excessive drop" in live pig prices on its official website on Wednesday, reminding pig farmers to scientifically arrange production and operation to maintain pig production capacity at a reasonable level.
To promote the smooth operation of the live pig market, the NDRC said that it would work with relevant government departments, closely monitor live pig production and market trends, and carry out adjustments to reserves in a timely manner.
"Prices have been hit as production picked up after outbreaks of the African swine fever and moves to replenish the country's pork reserves," Wang Zuli, deputy researcher at the Institute of Agricultural Economics and Development at the Chinese Academy of Agricultural Sciences, told the Global Times on Thursday.
The glut is hurting many pig farmers, who are losing money.
Li Yunlong, a hog farmer, told the Global Times that wholesale prices are plunging even as costs are rising.
"Compared with the beginning of the year, the cost of food and feed has increased by 30 percent, while the market price of pigs dropped by 60 percent," said Li.
"I lose almost 800 yuan ($124.36) in selling each pig but if I keep raising them I am going to lose more," Li added.
Wang told the Global Times that low prices may persist, and importers may also lower their soybean imports amid the dim outlook.
As the world's largest consumer of soybeans, China's soybean imports remained high during the first five months of the year. From January to May, China's soybean imports reached 38.234 million tons, an increase of 12.8 percent year-on-year.
The US, China's largest source of soybeans, is expecting record exports of about 36 million metric tons to China in the 2020/21 marketing year, as the China-US phase one trade deal remains in force, a senior industry representative told the Global Times in April.
However, due to declining demand, "soybean imports are set to drop for a certain period of time," Wang said.
Leading hog and feedstock producers in the country are also using less soybean meal to lower the country's import dependence on the crop under the central government's call.
The Ministry of Agriculture and Rural Affairs issued a notice in March calling on companies to reduce soy and corn content in animal feed.
Qin Yinglin, the president of domestic leading pork producer Muyuan Foods Co, said at a recent conference that the company has suggested a low-protein diet for hog breeding, as the nation's consumption of soybean meal to feed hogs "remains too high" in China.