Shares of Chinese butchers plunge as reports of African swine fever outbreak spreads in China
The deadly fever that hit northeastern Liaoning province in early August has spread to central China’s Zhengzhou city
Shares of “China’s No 1 butcher” WH Group, the world’s largest pork meat processor, plunged as much as 11 per cent on Thursday after news broke that mainland authorities shut down one of its slaughter houses where dead pigs had been infected with African swine fever.
Officials of Zhengzhou city in central China suspended operations and sealed off the slaughter house, which is controlled by WH’s subsidiary Shuanghui Development, for six weeks.
Hong Kong-traded shares of WH Group, which owns US-based Smithfield Foods, began to dive from HK$6.50 at 2pm after a number of mainland Chinese media published reports that 30 pigs transported from northeastern Heilongjiang province to the slaughter house had died from African swine fever. The stock closed 7.5 per cent lower at HK$6.08.
The circulation of the reports also triggered the sharp drop of Shuanghui shares in Shenzhen, which tumbled by their daily 10 per cent limit to close at 22.41 yuan.
A WH spokesman confirmed with the Post that the sealed off slaughter house was controlled by Shuanghui, without giving further details.
“2018 is really an unlucky year for WH,” said Barney Wu, analyst with Guotai Junan Securities.
“The swine fever incident is likely to weigh on both the supply and demand for the company’s products, as the expenditure for processing meat could rise, and consumers could be daunted by the incident and buy less meat,” he said.
