March 16, 2020 / 10:01 AM / 23 days ago

China encourages firms to raise pigs overseas to plug domestic pork shortage

BEIJING (Reuters) - China said on Monday that it is encouraging companies to build pig farms overseas to plug a severe domestic pork shortage after a worse-than-ever African swine fever slashed almost half of its pig herd.

China has urged local authorities to support qualified domestic firms to “go out,” and build hog farming bases in countries where pig products are eligible to be exported back to China, according to a joint statement issued by the country’s state planner and agriculture ministry.

Beijing has been taking various measures to boost pig production and increase pork supplies, after the deadly African swine fever significantly cut output and pushed prices of the country’s favorite meat to record high levels.

The latest official document, from the top economic planning body and agriculture authority, highlights Beijing’s concern as soaring pork prices pushed consumer inflation to its highest levels in years, and an unprecedented coronavirus disease further disrupted logistics and hindered pig production.

“Top government documents in the past usually stopped at trade, talking about buying either grains or pork from abroad, but never involved raising pigs overseas,” said an executive with a major pig producer.

“But then again, it also never happened in history that African swine fever has created such a big supply gap,” said the executive, who declined to be named as he was not authorized to talk to the media.

The pig farms should be built in countries with stable bilateral trade relations with China, and are African swine fever-free, according to the top government document, issued by National Development and Reform Commision and Ministry of Agriculture and Rural Affairs.

Beijing also urged local authorities to secure construction materials for new and expanded pig farms during the coronavirus outbreak, and allow farmers to build pig pens on deserted land and facilities for animal waste treatment and sterilization on some farmland, according to the document.

“The state hopes to boost pork supplies to normal levels as soon as possible, with all kinds of measures,” said Lei Yi, a Shenzhen-based analyst with China Merchants Securities.

“It encourages imports from overseas and raising pigs abroad as well. But it takes time for it to be implemented while not many companies have tried (raising pig overseas) before,” said Lei.

Beijing’s efforts came as African swine fever continues to spread in the world’s top pig herd. Three new cases of the virus have just been reported in China in the past week.

Reporting by Hallie Gu and Shivani Singh, editing by Louise Heavens

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