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Forecast for Chinese Pork Prices to Increase Again

by 5m Editor
20 September 2010, at 12:35pm

CHINA - Pork prices in August were steady, following a rapid rise in June and July but further rises are forecast in the coming months.

In August, China's pork market was steady, with no noticeable increases in price, according to an analysis by Frbiz.com, one of China's B2B search platforms. This steadiness was mainly due to the consumer atmosphere in the second quarter being influenced by fast rising prices in June and July, which were caused by pig diseases and China's southern floods decreasing pork supply.

The first week of this month, China's pork prices were at a record high. The national pork average wholesale price reached RMB17.21 per kilo – a year-on-year increase of almost eight per cent. Breeding stock numbers fell in July by 3.7 per cent year-on-year. In July, breeding stock was 44 million head, down 2.2 per cent year on year.

In September, after the beginning of autumn, the weather gets colder, which is the pork sales season. The Mid-Autumn festival and National Day holiday stimulate pork demand, and therefore the market demand of pork will increase. Plus, feed and raw materials like corn, wheat and so on will also maintain high operations and also stimulate a rise in pork prices. Therefore, in late September and October, pork prices may start a new rising price trend.

This year's high point will be close to the 2009 high level. As pork prices continue to rise, farmers begin to reduce the market availability rate of the livestock, therefore, the supply in such a tight situation may continue into the late fourth quarter. China's demand may exceed supply at the height of the pork season. According to the situation in August, the average wholesale price of pork was RMB17.00 per kilo, and the first week of this month, the price even reached RMB17.21. According to the current situation, Frbiz forecasts that this year's whoelsale pork price could reach RMB19 but will not exceed the RMB23 level seen in 2008.