(Yicai Global) April 15 -- Shares in New Hope Liuhe dropped as much as 5 percent today after the Chinese animal feed producer and pig breeder said its first quarter profit is likely to shrivel by up to 92 percent as the price of live hogs falls and the cost of raising pigs rises.

Beijing-based New Hope’s share price [SHE:000876] closed down 3.26 percent at CNY17.52 (USD2.68) today. It had earlier in the day dropped to CNY17.21.

The company’s profit for the three months ended March 31 is expected to be between CNY120 million (USD18.4 million) and CNY180 million, a huge fall from the CNY1.6 billion (USD245 million) the company raked in a year ago, New Hope said yesterday.

The shrinking profits are due to a big decrease in the price of pork as China’s live herds recover from an outbreak of African Swine Fever in 2019 that decimated pig populations, and the surging cost of grains used in animal fodder, all of which have chewed away at the company’s profit margin, it added.

The price of pork has plummeted 22.5 percent since January, when it was fetching CNY54.22 (USD8.31) per kilogram, and the end of March when it was selling for CNY44.09 per kg.

Pork prices are likely to continue to decline this year on adequate domestic supply, industry experts said.

Editor: Kim Taylor