Price summary

China's piglet prices were sharply higher in the south as farmers were active in taking up supplies in the week ending Sep 21. However, prices were only up slightly higher in the north as concerns over pig diseases had somewhat affected buying interest.

Market analysis

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

• Hog prices in most regions of southern China (south of the Yangtze River) have reached a one year-high in the past week. In Guangdong province, the price of foreign common crossbreed lean hogs were above RMB10/kg while those in Guangxi Zhuang Region were close to this level. In Hunan and Jiangsu, prices were at RMB9.50/kg.
  
  As hog inventories are currently low, market participants generally expect hog prices to improve further. In anticipation of high profits ahead, more hog raisers in southern China were reinvesting their current profit to replenish piglet stocks. Farmers' confidence was also restored after authorities there were able to contain the recent outbreak of pig disease.
  
  
• As the recent pig disease outbreak had caused hog inventory levels to fall in southern China, raisers' demand for piglets have increased. As piglet supplies in the south could only meet demand partially, some raisers have headed north to secure supplies.
  
  
• Piglet buying interest in the north was comparatively weaker than in the south. Market participants say that pig disease situation in parts of northern China had worsened and this had discouraged some raisers from taking up supplies.
  
  Despite strong demand from buyers in the south, analysts say that actual delivery volume was not as high as expected. In Guangdong, authorities there had banned the delivery of crossbreed sows and piglets from some northern commercial farms to prevent any spread of the disease to the province.

Market forecast

Concluding, analysts say that buying interest in China's piglet market are seen to rise further as hog prices look set to make more gains in the near term. Hog raisers in the north are also likely to increase their buying of piglets if the pig disease situation there is brought under control.