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26

2022

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11

Hog Prices Go Decline This Week as Scaled Breeding Farms Increase Selling Volumes

Source:

thepaper

The average price of pork in national wholesale agricultural markets was 33.23 yuan/kg on Nov.25, down 0.7% from the previous day and 2.3% compared with 34 yuan/kg last Friday (Nov.18). The weekly average price is 33.42 yuan/kg down 0.4% compared with 33.55 yuan/kg last week.

 

The average price of pork in national wholesale agricultural markets was 33.23 yuan/kg on Nov.25, down 0.7% from the previous day and 2.3% compared with 34 yuan/kg last Friday (Nov.18). The weekly average price is 33.42 yuan/kg down 0.4% compared with 33.55 yuan/kg last week.

 

This week saw a continuing decline in hog prices with a greater drop. Hog price (DLY) was 23.36 yuan/kg on Nov.25, dropping 7.9% compared with 25.35 yuan/kg last Friday, or Nov. 18th. The weekly average hog price was 24.3 yuan/kg, decreasing 4.3% week-on-week.

 

As for the outlook for market price, the listed group Wens thinks that pig prices may be boosted if consumer demand saw marginal improvement. Recent two years have occasionally witnessed Covid-19 epidemic outbreak and strict control of medium-and high-risk cities, where dine-in services are suspended, hurdling sales channel a lot. The hit in the restaurant and tourism industry weakens consumption demand in meat markets leading to a relatively prominent obstruction compared with demands in normal years before. If the COVID-19 epidemic is effectively controlled, people will regain their confidence in consumption, and even have revenge spending.

 

On the other hand, Founder Cifco Futures believes that the recent fast drop in hog spot prices is because farmers are eager to cash in profits. Also, flares-up nationwide weakened the end-consumption of fresh or chilled products month-on-month, far from people's foregoing expectations about peak consumption for cured and smoked pork in Nov. The time left for breeding people to get sales profits is shrinking, which will give further negative feedback on pig prices. Besides, there may be a significant rise in staged supply compared with October as second-fattened pigs which were held back selling would be sold at a concentrated time at the end of the year, especially when slaughtering enterprises gradually resumed working. The cost of fattening pigs may decline from a high point as feed prices will fluctuate with the centralized arrival of beans at ports. For the demand side, marginal consumption has been gradually suppressed by a historically relatively high pig price. The market lack firm confidence in the overall prospect for on-season.

 

Whereas Ruida Futures thinks whether the rise in demand can keep up with the incremental supply is a key factor affecting pig prices. The supply side now finds a more accelerated pace of the market and strong selling sentiment from private farmers. Hog supply is expected to rise in the short term as second-fattening pigs will gradually be sold. While the demand side finds a slower start in preserved pork in South China and weak consumer demand constrained by the epidemic. The increase in hog supply didn't bring a rise in slaughtering volumes correspondingly.