China Hog Market Weekly

Domestic supplies continued to outstrip demand on overproduction of live hogs, which reduced the profitability of hog production.

Hog prices in Hebei, Henan and Shandong provinces were stable. There were few transactions between slaughterhouses and farmers, since slaughterhouses have not stepped up procurements and farmers were unwilling to continue selling hogs at a loss. Thus, hog prices in those regions were stable.

In Hunan, Hubei, Guangdong and Sichuan provinces, hog prices moved lower. Many local farmers lowered prices to clear inventories. Cross-province deliveries of hogs were relatively more difficult than that of pork, which disrupted deliveries between production and consumption regions. Pork demand in hog production regions was also relatively sluggish. 

Hog prices in the Jiangsu and Guangxi regions were marginally higher in the past week, mainly due to a rise in local prices of domestic cross-breed lean hogs. The upcoming Qingming Festival also supported local pork consumption to a relatively greater extent than in other provinces. 

According to reports from Chinese farmers, domestic hog prices have reached very low levels, with bigger-scale hog farmers making more losses. However, many farmers who faced losses have turned to using lower-cost feed to continue raising fattening hogs, with the hope that prices will improve.

Market forecast

Many Chinese farmers who made significant losses have stopped raising additional hogs. However, the build up in farmers' inventories remained significant and will take time to ease. With no factors to stimulate pork demand in the near term, traders were also not inclined to stock up pork inventories. As more hog farmers are expected to lower prices to clear inventories over the next few weeks, live hog prices in China are likely to move lower in the near term.

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