(Yicai Global) March 17 -- China's pork production is under siege and at the mercy of the double-whammy of the African swine fever and the coronavirus epidemics, and China's National Development and Reform Commission accordingly issued a statement jointly with the nation's Ministry of Agriculture and Rural Affairs yesterday to let banks add live pigs to the catalog of items that may be pledged, and in which they encouraged companies to breed their swine overseas.  

China's pork prices remain high and thus raising pigs really brings home the bacon these days. Companies seeking to resume work and production face dire financial straits, however, a market insider noted, adding the fixed assets and materials invested in the building of pig farms are mired in the dilemma of being unable to be put up as collateral. China is thus also urging the banking and insurance sectors to offer more support to hog breeding and pork production, from which The country derives its main protein staple.  

China's pork output reached about 42.6 million tons throughout last year, dropping by 21.3 percent annually, data from its National Bureau of Statistics show.

The country is now piloting mortgages of land management rights, breeding enclosures and machinery used in pig-rearing nationwide, and is also trialing pledges of live swine for loans.  

Chinese companies have also actively positioned their pig breeding projects overseas, spurred by such hefty pork prices. Livestock breeder New Hope Group chose Vietnam as the first country in which to start its foreign business. The group, which has headquarters in Chengdu and Beijing, further proposed the aim of "achieving sales of 25 million live pigs by 2022" in 2018, and it has sunk about CNY1.1 billion (USD164 million) into pig breeding projects in three Vietnamese provinces since last year.

COFCO Meat Holdings, the affiliate under Beijing-based state-run China National Cereals, Oils and Foodstuffs Corporation -- better known as COFCO -- is also actively angling to enter the South American market to develop a project that integrates breeding, rearing and slaughtering.  

Breeders with better hardware and facilities will effectively lower the epidemic's impacts, said Lin Guofa, research director at BRIC, an online Chinese platform for farm produce purchases, adding this infrastructure will also be key to resolving the current issue of the insufficient labor force in the livestock sector.

South America is suitable for large-scale intensive breeding, building integrated supporting equipment for processing and exporting products to China as it boasts the advantages of lower feed and land costs and abundant supplies of grains and cereals.  

Editors: Zhang Yushuo, Ben Armour