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24

2022

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11

Widening Decline in the Spot Prices With Panic Selling in China's Pork Market

Source:

jwview

November's supposed to see a start for peak consumption season for cured and preserved pork. However, late cooling of the temperature, epidemic control nationwide, poor transportation, and other factors have delayed the high season in southern China.

 

November's supposed to see a start for peak consumption season for cured and preserved pork. However, late cooling of the temperature, epidemic control nationwide, poor transportation, and other factors have delayed the high season in southern China.

 

The overall slaughtering volumes, although slightly recovered compared with end-Oct, are still at a low level due to slack consumption disturbed by the epidemic, which handicaps the sales from the breeding side, especially for those fat pigs bred by private farmers. There's a passive upward trend in the weight of pigs sold to the markets.

 

Currently, pig prices are at a historical high point except for the ASF period (African Swine Fever), it's hard to predict as the short-term surge and fall can be easily affected by market sentiment, secondary-fattening behavior, epidemic flares-up situation, etc. The recent Covid-19 epidemic in many regions nationwide has exceeded people's expectations and farmers are worried about dispatch and transportation being obstructed, leading to a panic about selling pigs to the market exerting mounting pressure for staged supply.

 

In the early stage, the market had strong expectations for the incremental demand for preserved meat. However, the situation turns to be unexpected that only sporadic regions in Southwest China, Guangxi province, and Guangdong province began to consume cured pork amid Covid-19 outbreaks. The market sentiment turned pessimistic with spot prices close to the cost line of fattening pigs in the previous period, which will stimulate the panic of underselling, dragging down the prices for a short time.

 

In the follow-up, it's estimated to focus on the consumption of cured meat in South China and the sales of big pigs, and especially whether there will be a prominent improvement in demand side in early- and middle-Dec. Pig prices will be suppressed before the Spring Festival if farmers rush into selling big pigs in the same period as the next Spring Festival is earlier to come in 2023 making narrower periods left.