China’s chicken market easily saturated
The rise and fall of Chinese poultry prices over the past year reveals that chicken is still a second-class meat in the Middle Kingdom. Chinese poultry meat prices surged about 35 percent from April to November 2019, according to wholesale price data issued weekly by China’s Ministry of Agriculture and Rural Affairs. But all the price gains were erased by steady decline in 2020.
The spurt in poultry prices was driven by a meat shortage following the disappearance of at least 40 percent of China’s pigs last year due to the African swine fever epidemic. The rise in chicken prices coincided with an even bigger surge in pork prices. The poultry meat price peaked in November 2019, the same month as the peak in pork prices.
What’s surprising is that poultry prices declined as fast as they had risen. After reaching a November peak near 27 yuan/kg, wholesale poultry prices erased nearly all their 2019 gains and returned to 21.1 yuan/kg in June 2020, just slightly above their year-earlier level. Pork prices remained in the stratosphere, indicating that pork is still in short supply. The latest MARA release shows that July 2020 slaughter was down 32 percent from a year ago.
Historically, China’s pork prices have been more volatile than poultry prices. Pork prices occasionally rise 20-30 percent above the poultry price before the two prices converge. The poultry price serves as a floor for the pork price. The pork price has approached the poultry price during downturns.
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