Price summary

Increased pork demand during the recent Labour Day holiday in China failed to lift domestic hog prices during the week ending May 15.

The difference between pre- and post-holiday live hog prices was small. Prices in major hog production regions were stable to marginally lower, while price gains in some regions lasted only briefly.

With procurement prices of hogs still falling, hog farmers continued to incur losses. Many live hogs were delivered from coastal cities into production regions during the past week. Procurement prices were low especially since farmers were more inclined to release their hogs for sale.

Market analysis

Hog prices in Sichuan province fell mainly due to disruptions in cross province deliveries and few exports of pork products (exports were mainly to the Russian Federation). Some local frozen meat operations with significant build up in inventories were unable to clear sufficient stocks during the holiday period.

In Jiangsu province, hog prices showed signs of improving only briefly during the second half of the week in review.

Prices of domestic cross-breed lean hogs moved lower by RMB0.10-0.20/kg in some areas of Shandong province during the later part of the past week. This was mainly due to relatively lower priced hogs arriving into Shandong from north-eastern regions.

In the southern regions of Guangdong and Guangxi, hog prices moved lower due to the arrival of many hogs from major production regions such as Hunan and Henan.

Market forecast

As temperatures grow warmer in mid-May, China's pork consumption is expected to enter a seasonal lull. Although domestic hog inventory levels have fallen compared with the same period last year, sufficient demand is still needed to lift live hog prices. Thus, live hog prices in China are expected to remain weak for the remainder of May.