Market analysis

High feed grain prices continued to push up hog production cost. Of late, corn prices in central China and in the eastern seaboard provinces have risen to RMB1,650/tonne and RMB1,700/tonne respectively. Soymeal prices were also marginally higher.

Prices of feed had also increased RMB100-200/tonne due to higher grain and protein meal prices. Farmers will have to incur RMB120-180 more in rearing a hog up to finishing weight.

Meanwhile, despite gradual improvement in hog prices in the recent weeks, they were still lower compared with prices during the National Day holiday period in October.

In the past week, traders' maintained high asking prices for piglets as market supplies remained low. Hog farmers had thus remained cautious in making piglet purchases. The high production cost and lower profits from hog farming had affected piglet buying interest.

The pig disease situation has worsened in major hog farming areas of Hunan, Henan, Hebei, Shandong and Jiangxi provinces. Some farmers and animal health officials could barely deal with the situation.

In the north, the disease had killed all pigs in some farms. Under this situation, backyard farmers, most of whom do not have sufficient cash and were less skilled in nursing sick animals, have stopped making piglet purchases.

Market forecast

The high production cost and the fact that the pig disease situation had not been successfully contained in some regions, is likely to dampen buying interest and exert pressure on prices in the week ahead.

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