China cracks down on pig 'refattening'

Chinese farmers and small firms have increasingly bought market-ready pigs from larger breeders and fattened them in a bet on higher prices, but the government is cracking down on the speculative practice to slim down hogs and stabilise the market.

- ELLA CAO LEWIS JACKSON

For small breeders, "refattening" or buying adult hogs from big producers and feeding them for an extra few months until they put on an extra 40-50 kilograms is a way to gamble on pork prices rising.

But analysts say regulators are concerned the bets fuel big price swings and squander feed, in the latter case clashing with a national push to cut grain use in livestock, especially as the trade war with the US underscores a long-standing goal to reduce dependence on food imports.

"It can lead to short-term shortages followed by a glut, driving big price swings and unsettling the market," said Pan Chenjun, senior animal protein analyst at Rabobank.