Price summary

Price increases in northern regions were relatively smaller than those in the south, with the biggest gains reaching RMB0.10/kg and RMB0.25/kg respectively.

Market analysis

Live hog prices in China made only marginal gains during the past week mainly on account of the following: With farmers releasing hogs into the market at a slightly faster pace than the previous week, recent price gains were capped.

Pork demand has fallen after a folklore festival that falls on the seventh day of the seventh month in the lunar calendar (July 31 on the Gregorian calendar this year), further constraining the rise in hog prices.

The price difference of hogs between major hog production regions and main hog consumption regions has narrowed from RMB1.20/kg during the earlier period to RMB0.80/kg in the past week. This squeezed hog traders' profits, reducing hog delivery quantities.

Soaring temperatures of late have led to high hog mortality rates during deliveries and a significant fall in hog body weights by 5 to 8 percent. Consequently, domestic hog traders have shortened delivery distances in a bid to keep costs down.

Hog prices in the south rose by a relatively bigger extent than those in the north of late mainly due to the bigger difference in hog prices between the production and consumption regions during the earlier period.

Also during the earlier period, fewer hogs were released into local markets in central China's Hubei province amid flooding, driving up local hog farmers' price quotes above prevailing market levels. Consequently, local hog traders have cut down on procurements, leading to marginally lower prices there in the past week.

Market forecast

In light of currently reduced domestic hog inventories, more marginal gains in China's hog prices are expected in the week ahead.

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