Price summary

Many hog producers nationwide faced significant losses, with big-sized producers facing the most losses in the range of RMB100-150/head. Medium-sized producers faced losses of between RMB50/head and RMB100/head, while small-sized and backyard farmers saw no or less losses up to RMB50/head.

As hog prices continued to move lower in most regions, producers were less inclined to release stocks into the market. Slaughterhouses and meat processing enterprises also made little procurement, while traders were able to easily procure low-priced hogs that were widely available.

Market analysis

Although the price difference between hogs in northern and southern China continued to widen, deliveries to southern regions did not pick up as hog producers there were also making losses amid falling prices in most areas. Thus, traders in the south were inclined to make local procurements of low-priced hogs.

However, hog prices in the southern regions of Guangxi, Guangdong and Sichuan were stable to marginally higher in the past week.

In Guangdong, the recent cases of bird flu significantly dampened local chicken meat demand and exports. This lent some support to local hog prices.

Hog producers in Sichuan were in no hurry to release stocks into the market after rumours that local feed prices would rise were dispelled. Consequently, less hogs were available for procurement by traders, which lent some support to local hog prices.

Market forecast

Concluding, domestic hog producers made significant losses amid weak hog prices, sluggish pork demand and low quantities of hogs delivered over the past week. In light of the weak market situation, live hog prices in China are expected to continue moving lower for the remainder of March.

Source: eFeedLink - 14th March 2006