Market analysis

As piglet prices were still low, farmers who had earlier given up on hog farming had seized the opportunity to replenish some piglet stocks. Better buying interest had pushed up prices of native crossbreed piglets in Loudi and Changsha (Hunan province) and in most regions of Guangxi.

With the colder weather in China, particularly in the north, hog fattening and disease prevention costs will be higher.

High corn prices continued to keep hog production cost at a high level. In Shandong, corn prices were up RMB140-160/tonne in the past week, and buyers would have to pay RMB1,400 or above for a tonne of feed corn. This will send the cost of hog production by RMB50 per head.

Analysts also noted that disease prevention costs may also increase by RMB5-10 per piglet in the winter season. Despite expectations of improved hog prices next year, concerns over a possible recurrence of pig disease in the short-term as well as higher feed cost had discouraged some farmers from buying piglets.

Market forecast

The slight improvement in buying interest in some regions during the past week may not persist into the week ahead. Concerns over pig disease outbreaks in the near term and a substantially higher production cost may affect piglet buying interest.

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