Price summary

Live hog prices in China were relatively weak during the week ending Jul 10, but edged higher in Hunan and Hebei provinces. Hunan's hog prices, including that of domestic cross-breed lean hogs and foreign cross-breed lean hogs, rose by a relatively bigger extent of RMB0.15/kg from the previous week.

Market analysis

During the week in review, China's live hog market was characterised by the following:

• Cross province hog deliveries from Hunan have increased due to two factors. Firstly, Guangdong province has restricted hog deliveries from the Guangxi region due to the presence of clenbuterol recently found in Guangxi's hogs. This has supported more cross province hog deliveries from Hunan to Guangdong.
  
  
• Secondly, the advance lifting of restrictions on cross-province hog deliveries from areas in Hunan such as Xiangtan has allowed more hog deliveries to other provinces, consequently driving up local hog prices.
  
  
• Some major slaughter-cum-meat processing enterprises have cut down on hog procurements by different extents amid warmer weather, significantly reducing domestic trade of frozen pork and refrigerated meat.
  
  
• Additionally, some relatively smaller-scale slaughter enterprises have slashed their slaughter output by as much as 50 percent through fewer hog procurements, which weighed on domestic hog prices.
  
  
• Authorities in various provinces have actively supported hog farming, even to the extent of reducing farmers' losses in some regions. In particular, live hogs from Chongqing have been allowed for export to Hong Kong. Sichuan's provincial authorities have also been actively negotiating with the Russian government, seeking to conclude deals for pork exports to Russia within this year. This has lent support to hog prices in Sichuan.

Market forecast

China's hot weather in July will inevitably reduce domestic pork demand and limit cross-province deliveries. Analysts also expect few live hogs to be released into the domestic market this month. Live hog prices in China are likely to remain mostly stable in the near term, with marginal gains seen in some parts of southern and northern regions.