Price summary

Prices of native mixed-breed hogs in some major pig producing provinces fell below the level of RMB3.00/kg.

Despite lower costs of replenishing piglets, hog raising still yielded meager profits. Hog to feed ratio in most areas was 5.5 or lower, making rearing conditions more difficult.

Considering factors such as transport costs, the price difference between live hogs from northern and southern regions is at the most RMB1.10/kg. Few hog deliveries southwards were seen mainly due to the relatively high inventory build up in southern China.

Market analysis

Live hog prices in various provinces fell by different extents, except in the regions of Guangxi, Hunan and Hubei where prices were stable.

Prices in Hunan and Hubei underwent a period of consolidation, with only minor fluctuations seen. Cross province deliveries did not significantly affect market prices in both provinces.

Meanwhile, prices in Guangxi stabilised due to an increase in hog deliveries to Hainan province.

In other provinces including Hebei, Henan, Guangdong, Jiangsu, Shandong and Sichuan, hog prices fell by between RMB0.10/kg and RMB0.35/kg from the previous week. Few cross province deliveries were seen amid sluggish demand and hog diseases. Coupled with weak pork prices, traders were thus unwilling to deliver big quantities of hogs.

Market forecast

Supply and demand of live hogs in China's major hog producing regions are still in a state of disequilibrium. Sluggish demand has significantly dampened cross province deliveries. With residents consuming stockpiles of pork products and hog prices already falling below the break-even point of producers, live hog prices in China are expected to continue falling in the near term, but by a smaller extent.

Source: eFeedLink - 7th March 2006