WH Group said Friday that its fourth-quarter net profit fell 7 percent to US$290 million, as low pig prices in China and the Sino-U.S. trade war hit the income of the world’s top pork producer. The decline, based on a comparison of nine-month and full-year numbers released Friday, underlined challenges faced by pork producers in the world. Net profit for 2018 came to US$1.05 billion, WH Group said, down 4 percent from the previous year. Revenue rose 1 percent in 2018 to US$22.61 billion, it said in a statement. WH Group, which owns U.S.-based Smithfield Foods Inc., said average pork prices in the United States dropped 9 percent in 2018 due to higher supplies from an expanding slaughter sector. Also, the China-U.S. trade war has hit pork shipments between the two countries. In April, China slapped a 25-percent import duty on most U.S. pork products in response to U.S. tariffs on Chinese steel and aluminum products. Pork products were also included in a second round of tariffs of 25 percent introduced in July. Speaking to reporters, WH Group chairman Wan Long said the group’s pork shipments from Smithfield Foods to Shuanghui, its Chinese business, tumbled 45 percent last year due to the trade dispute. Weak exports and expansion of output in the United States pushed down pig and pork prices, and hurt company profit, Wan added. Lower pork prices in China due to an outbreak of severe African swine fever disease also hurt the competitiveness of U.S. exports, WH Group said. China is battling a fast-spreading epidemic of African swine fever. The disease has now spread to 28 provinces and regions since the first outbreak in August last year. Pig prices in major production regions fell sharply late last year after a government ban on live hog transport restricted trade and caused oversupply. (SD-Agencies) |