Price Summary

Attempts by commercial hog farms--especially those in southern China-- to raise prices were futile as the higher price offers can only deter buyers from taking up supplies.

Market analysis

Key characteristics of China's piglet market during the week in review were as follows: Hog raisers do not have much cash to buy piglets after incurring heavy losses earlier.

The low prices have also discouraged sow raisers from selling piglets. Most were keeping them for in-farm breeding instead. Some commercial farms were willing to release limited supplies at lower prices in order to reduce production cost. In Guangdong province, commercial hog farms have maintained higher offer prices for piglets in order to recoup production cost. In the past week, some commercial farms have taken up feed corn supplies at a high of RMB1,580/tonne.

The production cost of a piglet in Guangdong province currently stands at RMB200 per head and commercial farms there are offering supplies at higher prices than this. However, actual transacted prices were lower. Prices for some quality cross-breed piglets have fallen to RMB130-160 per head, and commercial farms there are losing an average of RMB50 from selling a piglet.

Market forecast

In the week ahead, buying interest in China's piglet market is seen weak. Small scale hog raisers are not likely to replenish their piglet inventories unless hog prices improve and enable them to return to profitability.