That whacky Chinese pork stock market

Friday, April 8, 2016

China produces nearly half of the pork in the world and the price of a hog is nearly three times as much as in the United States, according to The South China Morning Post. Still, Chinese production is falling. About five million small and medium-sized operators went out of business in 2015, (in 2010 half of the pork slaughtered in China came from backyard farms raising fewer than 50 hogs a year) with environmental concerns being a reason. Prices are expected to go even higher. Imports from the United States were more than 40 per cent higher in November compared to the previous year. But Chinese producers aim to fill that gap using western technology.

Feedmaker New Hope Liuhe Group, among others, plans to refocus as a pork producer, with an investment of C$1.84 billion in barns aiming to produce 10 million hogs in three to five years. WH Group Limited, which bought Smithfield Foods in 2013, is expected to be a major beneficiary, and shares traded on the Hong Kong stock exchange are expected to bring a 30 per cent return over six to 12 months. BP