STRUGGLING European pig farmers might want to look east for a glimpse of recovering demand.

    Chinese imports from the European Union (EU) have started increasing, according to grain trader Cefetra BV, which could support prices near a five-year low in Germany.

    The sales are coming after tougher Chinese regulation of pig farms caused the nation’s herd to shrink by 100 million in the past two years, a number equal to all the pigs in the United States, Mexico and Canada combined, Cefetra said.

    Pig meat prices slid 10 percent in the EU in the past year after Russia banned imports in retaliation for sanctions over its involvement in Ukraine, while bigger herds led to oversupply.

    In contrast, Chinese prices have jumped after the nation pushed out small holders by closing or moving farms in response to stricter rules on waste. The country consumes half the global pig total and European supplies account for about 80 percent of its imports.

    “When you look at pig prices in Europe and China, there’s a massive gap, so China could become a large pig meat importer,” said Harm de Wilde, a senior market analyst at Cefetra. “Chinese imports could potentially bring better prices and more demand for the EU.”

    Lower hog prices helped spur the European Commission to announce an emergency aid package for farmers last year. In China, pig prices surged a record 61 percent in the first quarter, the biggest jump since 2011.

    China’s imports will rise 26 percent to 1.3 million metric tons this year after climbing 35 percent in 2015, the U.S. Department of Agriculture’s Foreign Agricultural Service said in an April 5 report.

    The Chinese herd has dropped as local governments shuttered or relocated pig farms, especially those near densely-populated areas, after a law was introduced last year that penalizes breeders who mishandle waste. (SD-Agencies)