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- Hog futures in China tumbled to record lows amid fears of pork oversupply, the Financial Times reported.
- The slide comes after authorities encouraged farmers to stock up on pork reserves after outbreaks of swine fever.
- China, the world's top pork producer, has been having trouble with steadying its highly cyclical pork prices since 2018.
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Hog futures in China tumbled to record lows amid fears of pork oversupply, the Financial Times reported.
Dalian-traded hog futures -which allow investors to bet on the future direction of hog prices – slipped 30% since the contract began trading in January on the Dalian Commodity Exchange.
Hog futures on Tuesday dropped as much as 7.1% to $2,900 per metric ton.
The slide comes after Chinese authorities encouraged farmers to stock up on pork reserves and raise more pigs after outbreaks of African swine fever or ASF, according to the Financial Times.
The recent slide in prices stood in contrast with a similar situation two years ago when an ASF outbreak resulted in price surges on concerns of a lack of supply.
Analysts told the Financial Times that the current situation is exacerbated by Chinese media reporting that some farmers have started to slaughter smaller pigs and have been fattening their sows to the weights comparable to polar bears.
This, in turn, is prompting some level of alarm that prices will fall further due to an oversupply.
China has been having trouble with steadying its highly cyclical pork prices since ASF in 2018. Pork prices are a crucial component in the country's consumer price index.
The Dalian bourse made China, the world's top pork producer, become the second market in the world to trade live pig futures after the US, Reuters reported in December.