Price summary

In Sichuan, Hunan and Liaoning provinces, higher hog prices have encouraged some backyard farmers to start buying piglets, leading piglet prices to rise slightly.

Market analysis

Key characteristics of China's piglet market during the week in review include the following:

• Despite some improvement in market sentiments, there is only marginal increase in piglet transactions as most farmers were still cash-strapped after earlier losses. Higher feed costs and profit concerns had also led some farmers to remain cautious. Better poultry prices had also prompted some farmers to give up on hog farming, opting to raise poultry instead.
  
  

• Live hog inventories had continued to fall after a significant number of farmers had given up on raising hogs. Improved hog prices since early June had prompted sellers to hold on to their hog supplies. Some farmers who expected near-term piglet prices to rise had also started to make purchases.
  
  

• Fewer cross-province piglet deliveries were made as the prevailing hot weather could result in more piglet deaths during transportation. As commercial farms had earlier reduced their sow inventories, supplies of piglets have also declined slightly.

Market forecast

In the near term, lower hog inventories are seen to provide support for hog prices. However, analysts cautioned that improved hog prices may only lift piglet buying interest slightly as the hot weather--piglets are susceptible to diseases under such weather conditions--and higher feed costs may continue to keep some farmers cautious in buying piglets.

Source: eFeedLink - 23rd June 2006