Market indicators in the pig sector continue to show positive signs that prices will rise further in the coming weeks. Reports from China, the world’s largest market for pork, show that pig prices have surged 30% in April alone as falling domestic production leaves a shortfall in supply to meet rising demand.

There are a number of reasons for the decline in domestic Chinese pig production but one of the main causes is that small producers are exiting the sector in their droves in favour of better paid jobs in urban centres.

Approximately 55% of Chinese pork is produced by small scale farmers. However, a trend has emerged to show more and more of these small scale producers are exiting the industry in favour of more stable incomes in the cities.

Other reports from China suggest that toxins in Chinese corn supplies has caused issues for pig producers in the country which is also hampering Chinese production.

Frantic

The shortfall in domestic production has seen China turn to the global market for increased pork imports so far this year with strong demand from Chinese buyers at the recent SIAL trade show in Shanghai.

The UK levy board, AHDB, described the current buying by China as “frantic” due to the unique market conditions there. Chinese imports of pig meat from the US alone have rocketed so far this year – almost tripling in volume terms for the first three months of 2016.