(Yicai) March 12 -- After racking up significant losses last year, major Chinese pig breeders continued to face operating pressure in the first two months of this year because of falling live hog prices.

Muyuan Foodstuff sold pigs for CNY13.84 (USD1.93) per kilogram in the two months ended Feb. 29, compared with costs of CNY15.80 per kg, resulting in a loss of CNY2.3 billion (USD320.5 million), the Beijing-based company recently announced. Wens Foodstuff Group was in a similar situation, selling pigs for CNY14.02 per kg with costs of CNY15.6 per kg.

Hog prices will remain sluggish in the first and second quarters of the year as the cash flow shortage will be hard to ease in the short term, an industry analyst told Yicai, adding that the rising losses will drive bid breeders to reduce excessive capacity.

New Hope Liuhe, another leading Chinese pig breeder, reported revenue of CNY1.8 billion in February, down 15 percent from the previous month.

Some pig breeders in difficulties are even forced to reorganize or sell their assets to replenish liquidity.

Tech-Bank Food, a large agricultural and animal husbandry firm with nearly CNY4 billion of short-term debts as of Sept. 30 last year, announced yesterday to sell some of its shares in SciGene Biotechnology for CNY13 million (USD1.8 million). The firm has already bagged CNY1 billion from selling SciGene Bio’s shares this year.

Tech-Bank sold 401,200 pigs last month, down 43 percent from January, with its sales revenue down 31 percent to CNY442 million (USD61.6 million), the company announced on March 6.

Meanwhile, a court approved the reorganization request filed by the creditors of Aonong Group after the Fujian province-based big breeder failed to pay matured debts. Aonong mentioned that it may face bankruptcy risks if the reorganization fails.

Editor: Futura Costaglione