WH Group sees China’s pork prices falling over next 15 months after hitting record high in May

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WH Group’s Wan Long plans to import more pork products from the US to sell in China. Photo: Jonathan Wong

Celine Ge

Published: 3:54pm, 22 Aug 2016Updated: 11:00pm, 22 Aug 2016

The head of the world’s biggest pork producer expects China’s pork prices, a key driver of the country’s consumer inflation figures, to enter a downward trend over the next 15 months.

“Pork spot prices are likely to fall to 16 yuan per kilogram from historical highs of over 20 yuan by the end of 2016, and could continue dropping in 2017,” Wan Long, WH Group chairman and chief executive officer, told reporters in Hong Kong.

The CEO of the company known as “China’s No. 1 butcher” made the projections after China’s soaring pork prices retreated from a record high in May, while the surge in white meat prices in the first half of the year led to substantial inflation for Chinese consumers.

China accounts for around half of global pork consumption and its price factors heavily into the calculation of headline consumer inflation figures, known as the Consumer Price Index.

We are going to import more pork products from the US and put them up for sale in China given the price difference between the two countries

Wan Long, WH Group chairman and CEO

Sky-high pork prices in China, hovering around the level of 20 yuan per kilogram a few months ago, came as pork imports from countries such as the US reached a record 63,500 metric tonnes in May.

Authorities have attributed the recent pullback in pork prices to farmers increasing pig supply in response to robust demand as well as government measures to tap into its pig reserves to help fill the steep shortfall.