Price Summary

Although the Qingming Festival (a traditional tomb sweeping event which falls in early April) supported pork consumption in China to some extent, there was minimal effect on the domestic live hog market. China's hog market is currently marked by an oversupply of live hogs and sluggish pork demand.

Despite the fact that raisers in various regions are not carrying any hog inventories, hog supplies were more than adequate to meet current pork demand.

Market analysis

Hog prices in the Hebei, Shandong, Jiangsu, Guangdong, Guangxi, Hunan, Hubei and Sichuan regions moved lower by different extents in the past week. While prices in Henan province were generally stable, there were also signs of significant price falls in some areas there.

In some north-eastern regions such as Shenyang, Liaoning province, some farmers have stopped raising hogs after selling their remaining inventories at a loss. Some other local farmers who needed cash to enhance facilities and land sold many hogs during the earlier period, leading to currently reduced hog supplies in those regions. Thus, there was some small fluctuation of hog prices at low levels by RMB0.1-0.15/kg.

The build up in domestic live hog inventories was significant amid sluggish pork demand. Slaughter-cum-meat processing enterprises were more inclined to procure some domestic cross-breed lean hogs, which weighed on prices of some superior-quality hogs and common cross-breed lean hogs.

Market forecast

The build up in inventories currently remains significant in most major hog production regions. Slaughterhouses have procured many domestic cross-breed lean hogs in a bid to lower operating costs, which further weighed on prices of superior-quality hogs. The quantity of live hogs released into the domestic market should continue to increase in the run-up to the Labour Day holidays that falls on May 1. Thus, hog prices in China are expected to continue moving lower over the next two weeks.