China Hog Market Weekly

CHINA - In this weeks China Hog Market Weekly, eFeedLink report that significant inventory build up weighs on prices.
calendar icon 19 April 2006
clock icon 4 minute read
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Price summary

Live hog prices in China continued to move lower during the week ending Apr 17. This was mainly due to the following: The build up in inventories in major hog production regions was significant over the past few days. Due to sluggish pork demand, the pace at which hogs were released into the domestic market has slowed and hog procurements did not pick up.

With the continued increase in demand for beef and poultry meat, pork demand has decreased year by year. The number of hogs raised and released into the domestic market continues to increase annually. Most sows slaughtered had also passed their normal breeding period.

Market analysis

Live hog prices improved slightly by RMB0.10-0.15/kg in some areas within north-eastern regions. During the earlier period, many farmers in some areas of Liaoning and Heilongjiang provinces sold hogs at lower prices to clear inventories, leading to reduced local supplies.

Although hog prices in the Guangdong and Guangxi regions remained the highest in China, hog farmers in those regions still made losses. Except for foreign cross-breed lean hog farmers in Huizhou and Dongguan, Guangdong, who made small profits, other local hog farmers suffered losses in the range of RMB20-100/head.

In a bid to protect the local hog market, Guangdong's authorities have restricted the number of hogs from other regions entering the province. Authorities also continued to ban deliveries from some major hog production regions that used unapproved medicines.

In Guangxi, some sow raisers made profits of RMB10/head, while all other local hog farmers suffered losses of RMB20/head or only managed to break-even.

Hog farmers in Henan province suffered bigger losses in the range of RMB50-150/head. The extent of losses was biggest in Zhengzhou due to reduced hog deliveries to other regions including Shanghai and Jiangsu.

In Hebei province, hog farmers suffered losses to a smaller extent between RMB10/head and RMB35/head compared with Henan. The extent of losses by hog farmers in Jiangsu and Shandong provinces was in the range of RMB50-100/head and RMB70-100/head respectively. Foreign cross-breed lean hog farmers in Sichuan province broke-even, while domestic cross-breed lean hog farmers there suffered losses of RMB30/head.

In Hunan province, sow raisers suffered losses between RMB30/head and RMB70/head. Local farmers who procured piglets from other provinces to raise as fattening hogs suffered losses in the range of RMB60 - 100/head. Local losses generally did not differ much from that in Hubei province.

Except for Guangdong and Guangxi, the difference in live hog prices among northern and southern provinces currently continues to narrow, leading to reduced cross-province deliveries.

Market forecast

The build up in domestic live hog inventories currently remains significant. However, China's pork demand should improve to some extent in the run-up to the Labour Day holidays that fall on May 1. Thus, live hog prices in China are expected to improve slightly in the near term.

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