China begins first pork reserve restocking in 2023: NDRC

China’s economic planning body announced its first round of pork purchases this year for national reserve replenishment as the average hog price in the country plunged since late October last year.

The first round of state-backed pork buying will be conducted “in recent days” according to China’s National Development and Reform Commission (NDRC) on Monday. The intended purchase volume is 20,000 tons.

The announcement came two weeks after the alert of low hog prices in China from the NDRC as the key indicator of hog-corn price ratio fell below 5:1 for the first time since late April 2022.

Since the announcement, hog futures in China have gradually rebounded to the highest level in two months.

Meanwhile, the provincial government of Sichuan province also announced a state-backed pork buying program of 7,000 tons to “prevent hog prices from falling excessively”.

Hog prices in China started reversing lower in late October last year after hitting a peak of 27.66 yuan per ton. The downward trend continued for four months as the domestic market remained oversupplied.

The average hog price in China has plunged 47% in the past four months.

Despite the lifting of Covid restrictions in China, domestic demand struggled to keep up with supply as major hog breeders dumped their herds against the expectations of prices to fall further.