Market analysis

Farmers in some areas continued to hold on to their hogs, some of which were already overweight, in anticipation of higher profits. On the other hand, some hogs on offer had not attained the minimum finishing weight and were thus rejected by traders. Overall, market supplies had remained low.

Due to the significant price difference of hogs in production and consumption regions, traders were able to make a good profit. Near-term prices in the production regions may rise more strongly on positive demand, thus narrowing the price gap.

In the past week, Guangdong's hog prices were higher than those in Hunan by more than RMB1.00/kg. In Shanghai, prices were RMB1.20-1.50/kg more than those in Jiangsu, Zhejiang and Henan provinces.

The usual higher demand for pork from waxed meat and other preserved meat producers in this year-end period, as well as increased pork consumption by city dwellers in the run up to the Christmas season, had helped to lift hog prices.

Continued price fluctuation is seen in some regions, like prices in certain areas of Henan, Sichuan and Hunan provinces were weaker after cross-province deliveries have been banned for the past months after some farmers were discovered having fed banned drugs to their animals.

In addition, some pigs continued to be affected by diseases which conventional treatment had failed to work. Some farmers have thus released supplies resulting in lower procurement prices by traders.

Market forecast

With pork demand seen to remain strong in this year-end period, hog prices are expected to continue making more gains