China hog price jumps as Covid spurs short-term demand

The national average hog price in China strengthened for the past four consecutive weeks with pork demand spiking amid mounting fears of further Covid lockdowns across the country.

The price level jumped more than 5.5% on the week to 14.18 yuan/kg ($2,165/ton) last week, reaching the highest level in nearly three months, according to latest data from the National Development and Reform Commission (NDRC).

Higher hog price pulled the hog-corn ratio up 5.62% week on week to a seven-week high of 4.89.

Hog price continued to rise in recent weeks as slaughtering houses, pork traders and meat makers flocked to stock up their hog inventory in fears of potential supply shortage due to rising Covid cases in China.

The surge of prompt demand has offset the bearish impact on food demand from Covid lockdowns as people are stranded at home. Residents in China are also inclined to stay close to their hometowns during holidays to avoid the risk of getting quarantined elsewhere.

Many cities in northern and eastern China are still under lockdown which have caused a major disruption to the flow of goods within the country.

Residents in the country’s capital Beijing are said to have started panic-buying this week after the city reported more than 20 new Covid cases overnight.

Residents and companies are scrambling to secure spot supplies of food and raw materials to prepare for any potential future lockdowns.

In the meantime, the state stockpiler’s efforts of pork restocking have been undermined by the ongoing uncertainties surrounding Covid lockdowns as private companies refused to sell.

No trades were reported in the fourth round of national pork reserve restocking last Friday.

China has previously hosted three rounds of pork restocking with 38,000-40,000 tons traded in each round.