Price summary

Buying interest had improved only slightly in the provinces of Shandong, Hebei, Sichuan, Guangdong and Guangxi.

Market analysis

Some market participants forecast that China's hog prices will pick up slightly in autumn (September to November). Such expectations had prompted some farmers to replenish their piglet inventories so that grown hogs could be sold during the period before and after the National Day holidays (Oct 1).

In Sichuan province, transactions of native cross-breed piglets and were slightly higher than those of foreign cross-breed piglets. In certain parts of the province, a significant number of farmers have stopped raising hogs. Some commercial farms say that piglet sales have declined by 30 percent on-year while up to 80 percent of backyard farmers have stopped raising piglets.

Meanwhile, some farmers in the province who have stopped raising hogs for some time have shown interest in resuming the activity. However, high raw material and feed costs have prevented these cash-strapped farmers from doing so.

Overall, the marginal improvements in hog prices since early June have not lifted farmers' interest in buying piglet significantly. Big commercial farms had maintained high prices for piglets but medium and small-sized farms have lowered their price offers. However, these lower prices have also failed to attract much buying interest.

Market forecast

In the near term, higher temperatures across China may slow the process of hog fattening and make piglets more susceptible to diseases. This, coupled with continued torrential rain in the south as well as wheat harvesting in the north will affect farmers' interest in replenishing piglet inventories.

In the week ahead, the pace of recovery in piglet replenishment will continue to stay uneven. Piglet prices in China are unlikely to pick up much from current levels unless demand improves significantly across more regions.