Price Summary

Over-production of live hogs and a fall in pork demand weighed on hog prices. Due to narrow differences in hog prices between regions, hog traders were restrained in making cross-province deliveries.

Meat processing enterprises still had significant build up in inventories and were in no hurry to step up hog purchases. Farmers who needed cash to enhance facilities and land in preparation for spring ploughing sold hogs at a loss, especially in rural markets.

Market analysis

Live hog prices in Shandong, Jiangsu, Sichuan, Hunan and Hubei provinces moved lower, but prices in other regions were relatively stable.

Feed prices are currently stable, while prices of some feed raw materials such as corn have increased. With hog prices already at very low levels, the market outlook of hog producers have dampened.

Market forecast

In light of very weak hog prices, farmers kept increasing the weight of hogs held as inventories. Those who are unable to keep up with rising costs are likely to gradually undersell hogs in a bid to reduce inventories.

However, hog supplies will still outstrip demand in March. Thus, live hog prices in China are expected to remain weak for the remainder of this month.

Source: eFeedLink - 21st March 2006