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2022

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11

Double Drop in China's Pork and Hog prices; Supplies to Surge by 26%

Source:

SCI99

China's pork price will touch its highest point at the end of the year usually. But recent two years saw unusual signs of peak points showed in advance - mid-Nov in 2021 and mid-Oct in 2022.

 

China's pork price will touch its highest point at the end of the year usually. But recent two years saw unusual signs of peak points showed in advance - mid-Nov in 2021 and mid-Oct in 2022. The former is because the cured pork consumption season starts earlier last year while the latter is ascribed to more human-caused factors on the breeding side - the reluctance of selling pigs and activeness of secondary-fattening pigs.

 

According to the data from SCI99, 20% to 30% of pigs were sold to the secondary-fattening markets in some provinces which will be slaughtered from mid-Nov to Dec. As these hog supplies rush into markets in the following month, not only the numbers of hogs but also the pork weight from each pig will increase significantly due to the prolonged fattening period.

 

Besides, domestic medium-and large-sized breeding enterprises' completion rate of selling hogs is between 80% - 120% with the national average of 98.18%, slightly lower than the original plan.

 

About the reduction, it’s believed that on the one hand pig companies want to bring up their annual profits by adding up the weight of hog for sales; on the other hand, the National Day in Oct shortens the efficient selling period.

 

Then how much the supplies for the end-2022 will increase based on the reduction in Oct? According to SCI99, sample enterprises selling volumes planned to increase by 6.86 p.p. month-on-month. That is to say, the total number of pigs sold by medium and large breeding enterprises may increase by more than 7% MoM.

 

Regarding the slaughtering weight, its average in national key slaughtering enterprises increased by 0.41% on average every week from late Oct to Nov.4, higher than the previous average level.

 

Overall, it's estimated that the monthly theoretical pork supplies from Nov to Dec may exceed 26% of the average Aug to Oct supply.

 

Although the market may find a prominent rise in pork supply, the price trend also depends on the consumption demand. Pork consumption has traditionally increased at the end of the year, which can be seen in changes in slaughterhouses.

 

Based on the monitoring by SCI99, the daily average slaughtering volumes of key enterprises are higher by 9.56% from Nov to Dec than that from Aug to Oct from 2018 to 2021. That is to say, pork consumption surged by 10% more than previous months in usual.

 

However, SCI99 also estimates that this year the slaughtering volumes are hard to exceed the 10% increase due to the high pork prices and other meat substitutes such as fish and chicken.

 

Xin Guochang, deputy director of the Animal Husbandry and Veterinary Bureau of the Ministry of Agriculture and Rural Affairs, warns that pork supply is sufficient and it's unlikely to surge significantly for pig prices. He also stressed that farmers need to be guided to sell pigs in an orderly manner to prevent the "barrier lake".