New data show that China's hog and sow populations have started to increase in March again. The development is considered as a sign that the country's demand for feed grains will increase soon.

Based on a survey of major hog producers, Gro Intelligence's data shows that China's hog herd grew 1.06% in March from the previous month, while the sow population expanded 1.96%. That follows declines in herd size in both January and February, as colder temperatures stoked ASF infection rate, especially in Northern provinces.

Renewed growth in China's hog population has pushed down the price of live hogs by 36% from a recent peak in January.

The report including the data continues to expect a full recovery of China's hog herd in the second half of 2021, after African Swine Fever (ASF) wiped out roughly half of the country's hog population in 2018-19.

CHINA IS A KEY PLAYER

China is a key driver of global pork, grain and oilseed demand, and the report provides a leading indicator of pork demand and, so, prices of hogs, grains and oilseeds for the coming year.

The hog herd recovery, along with increased industrialization of the hog industry, was the main driver of China's record grain imports in 2020, including 4.3 million tonnes of US corn.

New crop plantings in the United States will be critical to satisfy any future growth in China's feed demand.

However, a recent USDA report shows farmer planting intentions are for fewer corn and soy acres than the market had expected and, therefore, ideal weather conditions will be needed to replenish currently tight supplies.