(Bloomberg) -- China’s pork prices are likely to recover in the second half of the year, according to Liu Yonghao, chairman of New Hope Group, the country’s biggest animal feed maker and one of the top meat suppliers. 

“This pork cycle has been longer than expected, but we still have confidence,” Liu told reporters on the sidelines of Chinese People’s Political Consultative Conference on Monday. “There are better chances that hog producers will stop making losses in the second half.” 

Liu’s comments echo views in the industry that prices of the country’s most popular meat could rise as farmers reduce their hog herds, while demand may improve later in the year during the traditional peak demand season. 

Read More: China’s Lunar New Year Pork Gloom Exposes Deep Economic Trouble

The agriculture ministry last week cut its target for the sow herd to 39 million head from 41 million, the first such move since the goal was set in 2021. The sow herd totaled 40.67 million at the end of January, after shrinking for 13 straight months. 

The target revision will prompt hog breeders to accelerate capacity cuts, mitigating the surplus, Fitch Ratings said in a note. But the easing is likely to be gradual, with oversupply lasting at least into the second quarter.

The boom and bust periods in the Chinese hog market, the so-called pork cycle, usually last three or four years as farmers expand herds to capture higher prices, only for the additional supply to later overwhelm demand. Hog prices are still hovering around the lowest levels in years.

China accounts for almost half of global pork consumption and hog production, eating five times more of the meat than the US every year. Food makes up a fifth of the consumer price index with pork, in turn, a large component. Falling prices for the meat helped drag down the food category by 5.9% in January, the biggest decline on record in data back to 1994.

©2024 Bloomberg L.P.