Price summary

Piglet replenishment activities had gradually declined since the start of the National Day holidays period.

In the past week, piglet prices were stable to marginally lower in most regions while buying interest continued to stay weak.

Market analysis

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

As most farmers' hog inventories were low, some of them had intended to replenish their piglet stocks. However, the colder weather in the past week as well as news of outbreaks of pig diseases in Hebei, Shandong, Hunan, Henan and Jiangxi had dampened farmers' interest in taking up piglet supplies.

Current corn prices in northern China were at RMB1,200-1,340/tonne while those in the south had increased to RMB1,330-1,500/tonne. These prices were higher compared with the previous year, and it had resulted in higher production costs for hog farmers.

The higher production cost and the resulting lower profit margins had thus discouraged some farmers from replenishing their piglet stocks. In parts of the corn production regions in the north-east, some farmers' profit from hog sales were just slightly above break even level.

Analysts noted that despite the fewer piglet replenishment activities, piglet prices had not declined very much in some regions. Supplies of piglet in these regions were low as breeding sow inventory levels had also remained low.

Market forecast

In the week ahead, piglet replenishment activities are expected to remain low. Analysts say that buying interest would only pick up if piglet prices declines further from current levels.