Sen Yu International Holdings, Inc., a company that engages in breeding and raising commercial hogs and piglets, and distributes them to the slaughter facilities and pork distributors in the People’s Republic of China, announced that the increasing pork prices are expected to help boost breeders’ profits and support growth as farmers are encouraged to replenish their hog stocks and increase their supply.

The average wholesale price for pork arrived at 24.8 yuan ($3.86) per kilogram last Tuesday, July 5, at the Beijing Xinfadi Farm Profuct Wholesale Market, a three-year high since 2008, in accordance to a report from China’s Global Times. The average price of lean pork, in between June 21 and June 20, arrived at 30.58 yuan per kilogram, a 5.3% increase from the prices seen from June 11 to June 20. The price of pork belly increased by 5.4% for the same period; the biggest increase since early February.

Observers believe that pork prices will keep increasing until the end of this year. Increased prices are being driven by the insufficient pork stock and the pig epidemic from late 2010 to early 2011 and are also linked to the rise in the price of corn, which amounts for about 60% of pig feed. Following the Chinese New Year, supplies of pork decreased as most stored pork was sold in the peak season. June tends to be the low season for pork sales and a time to replenish the stock for pork, which has contributed to tighter pork supply. As the hog breeding industry needs a period of production cycle recovery, it is anticipated that pork prices will stay stubbornly high in the upcoming term. Pork amounts to about 65% of meat consumption in China.

“In the near term, higher pork prices will lead to increased profits for breeders,” commented Mr. Zhenyu (Jack) Shang, Founder, Chairman and CEO of Sen Yu International Holdings, Inc. “Sen Yu has a well-established brand and is the leading commercial hog breeder and supplier in Heilongjiang Province. Under our partnership-based business model, this could increase the number of hog farmers that we work with while the increases in average prices of commercial hogs support higher revenue, gross profit and increases in gross margins that we have experienced. Though we expect pork prices to fluctuate over time as increases in supply come into the market, we believe that China’s economic expansion and rising middle class with its taste for high quality pork will continue to spur demand for our superior quality breeding and commercial hogs for the long term.”

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