Plunging pork and poultry prices put pressure on Chinese farmers
Analysts said weak end-market demand and high inventory levels are weighing heavily on the breeding sector, and that while marginal improvements are expected in the second half of the year, the overall scope for recovery remains limited.
The trend highlights the fragility of China's economic recovery under persistent deflationary pressure, with losses now common among livestock farmers.
Many farmers have taken to social media to lament their plight.
'I haven't made any money since February, and I can't afford to replace the cages even though they're broken,' a farmer in Shandong province said on Monday in a post on Douyin, China's version of TikTok, adding that she was losing over 300 yuan (US$42) a day on her more than 6,000 egg-laying hens.
China's consumer price index, a key gauge of inflation,
entered positive territory in June for the first time since January, but food prices were down 0.3 per cent year on year, the fifth straight month of decline, Lynn Song, Greater China chief economist at Dutch bank ING, said on Wednesday.
Most types of food remained in deflationary territory, with the price of pork, down 8.5 per cent, and the price of eggs, down 7.7 per cent, exerting the most downward pressure. Aquatic products, up 3.4 per cent, and fruit, up 6.1 per cent, were among the few categories that saw price increases.
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