China Piglet Market Weekly: Piglet Demand Improves

CHINA - In this weeks China Piglet Market Weekly, eFeedLink report that Farmers' interest in replenishing piglets improved on the back of higher hog prices during the week ending Aug 3.
calendar icon 4 August 2006
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Price summary

However, the hotter weather had prevented some farmers from making big volume purchases on concerns of pig diseases. Piglet transactions have thus only increased slightly but prices were marginally higher.

Market analysis

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

For the past two weeks, China's hog prices have improved significantly, reaching a record high level for this year. Most raisers were able to return to profitability, making between RMB20 and RMB80 per head of hog.

Recent gains in hog prices were driven by lower supplies, as some raisers have cleared their stocks, or have given up on hog farming earlier. With better hog prices, farmers' interest in piglet replenishment has also improved.

During the week in review, however, pig diseases were reported in some provinces. Some farmers who were concerned over the possibility of more pig disease outbreaks under the current summer heat have bought fewer piglets for restocking.

Persistently high feed cost and some farmers' lack of cash had prevented them from making big volume piglet purchases. With higher feed cost, farmers would have to incur more cost in fattening hogs.

Meanwhile, raisers with hogs on hand mostly preferred to hold on to their inventories as they expect hog prices to improve further. Thus, piglet buying had only picked up slightly although hog prices have continued to improve.

Market forecast

The current high summer heat, as well as concerns over the survival rate of piglets had led to a weaker-than-expected increase in piglet purchasing activity. However, piglet prices have managed some gains on slight improvement in hog market fundamentals.

In the week ahead, analysts expect piglet transactions to remain at current levels. In regions where piglet supplies are low, prices are likely to continue making gains.

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