Price summary

In Sichuan and Hunan provinces, hog prices rose by a smaller extent compared with the previous week. However, marginal falls in the range of RMB0.10-0.20/kg were also seen in some areas of both provinces.

Hog prices were stable to marginally higher in the north-eastern provinces of Liaoning, Heilongjiang and Jilin amid reduced local hog inventories.

Market analysis

Hog prices rose by a relatively bigger extent in northern regions than those in the above three north-eastern provinces, but at a slower pace compared with the previous week.

Following gains in China's hog prices the previous week, Chinese hog farmers have been restrained in releasing their hogs into the market.

With the delivery of lower-priced hogs from provinces such as Inner Mongolia and Shandong to north-eastern regions, hog prices in the north-east rose at a slower pace during the past week.

Live hog prices rose steadily in Hunan province. Although the rise was only marginal, local prices of foreign cross-breed lean hogs and domestic cross-breed lean hogs were given a boost, with the highest transacted prices reaching RMB7.10/kg and RMB6.40/kg respectively.

With restrictions on cross-province hog deliveries from Hunan's Xiangtan area lifted in advance during the later part of the week in review, many hogs there have been delivered to Guangdong province. This has lent support to overall hog prices in Hunan.

Cross-province sales from major hog production regions including Hunan and Hubei to Hong Kong were generally stable.

With fewer exports of pig products from Sichuan province to the Russian Federation during the first half of this year, more pork has been diverted towards intra-province sales. The resulting build-up in local pork inventories has weighed on Sichuan's hog market to some extent.

Additionally, many local hog farmers have lowered their prices to move sales amid water-feeding difficulties brought about by dry spells in many parts of Sichuan during the past week. Coupled with sluggish local hog demand, hog prices in Sichuan fell by RMB0.10-0.20/kg during the early part of the week in review, and ended marginally higher by a smaller extent compared with the previous week.

Market forecast

As hot weather is expected in July, pork demand in China is likely to remain sluggish, with limited hog deliveries seen. These should weigh on domestic hog prices.

China's live hog prices are expected to be generally stable in the week ahead, with gains seen in some regions where hog inventories are reduced.