Price summary

Restocking activities have picked up only slightly in certain regions and there were few big volume purchases.

For the past two months, sporadic outbreaks of pig diseases have continued to affect farmers' interest in buying piglets. In most farms, piglet inventories were still low.

Market analysis

Key characteristics of China's piglet market include the following:

Piglet replenishment have picked up only in certain regions. In Sichuan province, active buying had caused sellers to temporarily run out of stock of foreign cross breed piglets while prices of such breeds had gained as much as RMB1.50/kg. In Chengdu, the price of foreign cross breed piglets hit an intra-week high of RMB8.00/kg.

In neighbouring Hunan province, prices of native crossbreed and foreign crossbreed piglet gained only marginally. Buyers there were generally not making big volume piglet purchases. In Huaihua region of Hunan, some piglet deliveries were made to buyers in Guangdong province.

The pick up in piglet buying was confined to certain regions only, a sign that showed that overall market fundamentals have not improved much. Some bigger commercial farmers have only managed to break even at best while raisers whose pig breeds were of lower quality have continued to incur losses at RMB30-70 per head.

Higher feed cost will affect farmers' profitability and it is now a key factor influencing piglet buying decisions. Corn prices in the main production region of Hebei province has remained high at RMB1,400/tonne, and this had led farmers to hold back on restocking piglets in some regions.

In the past two months, outbreaks of pig diseases have been reported in parts of northern China. Additionally, the summer heat also threatens piglet survival and causes diseases such as swine fever. Some farmers thus prefer to maintain a low piglet inventory than be exposed to such risk.

Market forecast

Concluding, buying interest in China's piglet market is seen to remain lacklustre. Concerns over higher incidence of pig diseases under the current high summer heat will continue to discourage farmers from taking up piglet supplies.

Piglet prices are likely to remain at current levels in most regions in the absence of a strong demand recovery.