The
price of live pigs in China was marked by many fluctuations throughout the year
2016. Governmental policies had a huge impact on the business of manufacturers,
including relocations, which regulations are going to be even stricter in 2017,
according to CCM’s research.
Source: Pixabay
Price development
Looking
at the price development of live pigs in 2016 in China, the month may represent
the peak of price with an amount of USD3,771/t. This price is an increase of
more than 36% compared to the year 2015 and even 55% to the year 2014.
Generally, the price of pigs was higher than the two previous years before from
January to July 2016.
China’s
monthly market price of live pigs, 2014-2016
Source:
CCM
In
the second half of 2016, the price of live pigs starts dropping in 2016 and
even fell under the price of the same period of 2015. The price in 2016 then
stayed lower than the price of 2015 the whole second half of the year.
According to CCM, the average price of live pigs in 2016 was able to increase
by more than 14% in comparison to 2015, thanks to the very strong rise in H1.
Policies
China’s
government has shown a strict hand against the manufacturers in the forbidden
farming areas of the country. These farming areas are mostly situated in the
southern regions of China and the coastal line. Forbidden farming areas have
been introduced in the Law of
Environmental Protection of the People’s Republic of China from 2015, with
a death-line for businesses to leave the forbidden regions until the end of the
year 2017.
The
traditional pig industry in China consisted normally of small and medium-sized
companies, owned and run by individual farmers. Therefore, the monetary
possibilities of taking care of the pollution they produced, were close to
non-existent. With the new Environmental Law, however, these farmers are now
forced to upgrade their waste disposal or withdraw from the market.
CCM
has analysed the most important policies throughout the year 2016 regarding
live pig farming. The key results are restraints in several and supported
development in other Provinces of China, to control the areas of farming. Also,
a strengthened supervision of the pollution sources will be carried out.
Measurements to delimit the forbidden areas of livestock and poultry are
pointed out. And finally, the discharge fee system will be substituted by an
environmental tax system.
Movement of farmers
According
to the plan to delimit the live pig farming in southern China, until the end of
2017, many companies and farmers have already moved towards north and west. The
movement and investments of big enterprises into the rural areas of China, on
the other hand, fills the market gap that was caused by the withdrawal of the
small and medium-sized companies from the market, due to the environmental
protection law.
The
main Focus of the developing areas lays in the northeast and the south-west of
China. The huge western area of the country is considered as a moderate
developing area for the pig industry.
Chinese profits
According
to CCM, the rising live pig prices in the first half of 2016 have gained the
Chinese manufactures some decent profits. The revenues of most live pig farming
companies have shown huge increases, partly up to 96% from the period of
January to the September 2016 year on year.
Benefitting
from the good development of the pig farming industry, feed companies in China
could also get some revenue increases, up to 13.40% year on year in the same
period.
About CCM:
CCM
is the leading market intelligence provider for China’s agriculture, chemicals,
food & ingredients and life science markets.
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