China’s national breeding sow inventory will be reduced by 1 million from the current level of 40.38 million to ease an oversupply of pork in the market that has suppressed swine prices and raised deflationary pressures in the economy.
While specifics of the reduction were limited, it would take the national sow herd size down to 39.5 million, CLS.cn said in an exclusive report, citing a plan proposed by the Ministry of Agriculture and Rural Affairs last week.
The ministry was looking to ease industry losses caused by an oversupply of hogs and persistently low pork prices, the website, which is an online tech and financial news platform, reported on Tuesday.
In addition to cutting the number of sows, regulators have reportedly introduced stricter rules for pig farms, like prohibiting pigs that have already reached the slaughtering standard from continuing to be fed to increase their weight before being sold – an industry practice blamed for worsening short-term oversupply and further depressing prices.
The measures are not only aimed at restoring a healthier supply-demand balance in the pork sector, but also at easing deflationary pressure in the broader economy, since the price of pork is highly weighted in China’s consumer price index that tracks the price changes of a basket of goods and services purchased by consumers.
2025 could be another year with persistent deflationary pressures, unless the stimulus is big enough to create another credit upcycle, according to a report by Macquarie last week.
China’s GDP deflator has fallen for eight quarters in a row, marking the longest deflationary streak in the past four decades, the report said, referring to the measurement of the overall price level for new, domestically produced goods and services – making it a broad measure for inflation.
