Market analysis

Many hog raisers in China had incurred losses and quite a few have already given up on raising hogs. In the major hog-producing regions, raisers were generally not keen on buying piglets.

The oversupplied situation in the piglet market was further compounded by improved piglet survival rate due to the warmer weather conditions.

Across most regions, piglet prices continue to fall. In Henan and Jiangsu provinces, piglet prices have hit new lows.

Despite the substantial price gaps between different regions, there were few cross-province piglet deliveries as transporting them over long distances under warmer weather may affect their growth in the early stages of fattening. Meanwhile, higher fuel prices also contributed to increased transport cost and discouraged traders' from making cross-province sales.

Unless demands pick up substantially, analysts say that piglet trade in China is likely to remain sluggish. This can be seen in traders' reluctance to increase cross-province deliveries even though they can make profit out of price differentials.

Increased buying of pork products by Russian authorities--under their food for oil programme--from Guangxi led the region's hog prices to rebound on Apr 19, thus giving a lift to piglet prices. However, piglet prices in Guangxi were still lower on a weekly basis.

Market forecast

Hog raisers in China would only step up their buying of piglets provided that hog product prices improve and hog inventories in farms fall to a sufficiently low level.

In the run up to the Labour Day holidays, pork consumption may rise but hog inventories in farms are not likely to fall significantly. Piglet prices in China are still expected to remain weak as supplies continue to outstrip demand.