Price summary

Farmers were more active in restocking piglet after gains in hog prices in the past week fuelled expectations of better prices going forward. Some commercial farm owners from the south had also looked to the north to purchase piglets.

Market analysis

Key characteristics of China's piglet market during the week under review were as follows:

• In Hunan province, active piglet buying by farmers who intent to resell them when the animals reach maturity prior to the Spring Festival next year (Feb 2007) have pushed up prices of native crossbreed piglets there.
  
  In Sichuan province, prices of native common crossbreed piglets were lower amid fewer deals concluded. Most farmers there had taken up supplies earlier.
  
  

• For the January-June period, China's hog inventories were lower compared with the previous year. Persistently low hog prices amid dismal sales had affected piglet prices as well, which led some loss-incurring farmers to give up on hog raising.
  
  The recovery in hog prices in the past two weeks had enabled some raisers to break even or make some marginal profit. Buying interest had picked up among small farm owners who were seeking to resell their grown pigs prior to next year's Spring Festival season.

Despite the improvement in buying interest in China's piglet markets, analysts say that the rise in piglet transactions was not as significant as expected. This was due to:

• Earlier, some big commercial farms who were experiencing cash flow problems had released some piglet supplies to buyers. These big sellers thus had fewer piglets to offer this week.
  
  

• Higher industrial demand for corn had pushed up prices of feed corn as well. The higher feed cost had deterred some cash-strapped farmers from taking up supplies.
  
  

• More farmers are now paying attention to keeping a healthy herd of piglets. Concerns over survival rates had thus prevented small and medium-sized farm owners from taking up supplies from commercial sellers in provinces farther away.

Market forecast

The recent recovery in hog prices, if sustainable, is expected to give a further boost to piglet buying interest in China and expectations of significant improvements in profit will far outweigh concerns of higher feed cost. China's piglet prices are expected to continue making some gains in the week ahead.

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