Market analysis

In northern China, live hog prices rose by a relatively bigger extent as local hog inventories continued to decline. There was a narrower difference between hog prices in north-eastern provinces such as Liaoning and Heilongjiang, and those in southern China's Guangdong province.

Despite relatively sluggish demand for pork in China, Chinese consumers have turned more to meat amid continued increases in vegetable and aquatic product prices, consequently driving up domestic pork prices to some extent.

With vegetables priced higher than meat including pork in Guangdong, local residents have consumed relatively more meat products, lending support to hog prices there.

Slightly cooler temperatures in southern China after the recent rains have facilitated hog deliveries from northern to southern regions. Thus, hog prices in northern China were stable to marginally higher.

Due to recent human cases of bird flu in China, pork demand has been relatively better than that of poultry meat. This has lent further support to hog prices in the country.

Some regions where hogs were usually priced lower have reported relatively bigger price gains recently, reflecting the slight increase in hog deliveries to other regions amid relatively cooler temperatures.

Market forecast

Despite currently reduced live hog inventories in China, hog prices in southern regions have only made marginal gains.

Slightly higher temperatures in China are expected next week as torrential rains in parts of the country continue to subside. Coupled with relatively high hog prices in northern regions, hog deliveries from northern to southern China are likely to be reduced, with some low-priced hogs also seen entering northern provinces.

Live hog prices in southern China are expected to edge higher in the week ahead, while minor fluctuations are possible in northern regions.