Price summary

Live hog prices edged higher in Sichuan and Hunan provinces. In Henan province, hog prices were unable to sustain initial gains for long, ending only marginally higher at the close of the week in review. Hog prices rose by RMB0.10-0.20/kg in Hunan and Henan, while making relatively bigger gains in Sichuan by an average of RMB0.20-0.50/kg.

Market analysis

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

Hog demand by slaughterhouses and small-scale meat processing enterprises has slowed down significantly. Significant domestic demand for frozen pork has dampened consumption of fresh pork and hence demand for newly slaughtered hogs.

Significant quantities of freshwater aquatic products have been released into the domestic market. This, coupled with competition from other food products including beef, mutton and eggs, has negatively affected domestic pork demand to a big extent.

Live hog prices were stable to marginally higher in Hunan, Sichuan and Henan provinces. In Sichuan, increased cross province hog deliveries and pork sales of late have given local hog prices a boost. The peak farming season in Hunan has led to strong local demand for pork from domestic cross-breed lean hogs there, with local prices of domestic cross-breed lean hogs rising by a slightly bigger extent than that of foreign cross-breed lean hogs.

Meanwhile, hog inventories in some parts of Henan were reduced. Local hog prices immediately edged higher by RMB0.10-0.15/kg on increased demand by local hog traders.

Market forecast

Currently hot weather in China has limited cross-province deliveries, and might see domestic pork demand in July being the lowest for the year. Although fewer live hogs have been released into the domestic market, China's hog prices are expected to extend only marginal gains in some regions in the week ahead.