Pork futures in China fell to a record high on fears of oversupply of pork, the Financial Times reported.
Long pork runs traded on Dalian, which allow investors to bet on the long-term direction of red meat costs, have fallen 30% since the contract began trading on Dalian’s stock exchange in January.
Pork futures fell 7. 1% to $2,900 a metric ton on Tuesday.
The recent drop in costs contrasted with the scenario two years ago, when an asfly outbreak triggered an increase in costs due to fears of lack of supply.
Analysts told the Financial Times that the existing scenario is exacerbated by Chinese media reporting that some farmers have slaughtered smaller pigs and fattened their sows at a weight comparable to that of polar bears.
This, in turn, creates a sure point of alarm that costs will fall further due to oversupply.
China has struggled to stabilize its cyclical value of red meat since PPA in 2018, and the value of pork is a component of the country’s customer value index.
Dalian’s stock swap has made China, the world’s largest red meat producer, the world’s second-largest market for pork futures trading after the United States, Reuters reported in December.