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27

2022

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11

China's Pig Price to Have A Staged Rebound in Dec

Source:

SCI99

It's estimated that the operating rate of slaughtering farms may up to relatively high within the year increasing the pull effect of fat pigs on standard pigs.

 

A quarterly decrease in hog sales volumes will be found in Q3 of the following year due to a low survival rate of piglets in winter caused by seasonal problems such as diarrhea and regular diseases every year. Generally, there's a quarterly upward trend in hog prices from July to Sept, and Sept to Oct will be the transition stage of further peak season in which prices of pigs with standard weight will be lower than those of fat pigs. More near the Q4 on-season, a more prominent rise will be in the prices of fat pigs and a more expanded gap between their prices.

 

As the weather turns cold in Nov and Dec, households will start consumption such as curing and cooking sausages increasing the demand for fat pigs and the price gap between pigs with standard weight and other fat pigs will expand larger. The price gap or the spread turns from positive to negative in Sept 2022, slightly widened in Oct yet narrowed in Nov. By Nov.16th, the spread dropped to 0.4 yuan/kg. It mostly maintains at 0.5-0.8 yuan/kg, far less than the normal level in previous years (about 1 yuan/kg).

 

Note: pigs with standard weight: above 120 kg; fat pigs: above 140 kg. The price gap = the price of pigs with standard weight - the price of fat pigs

 

There exist a high proportion of second-fattening pigs in Q3 in the market, thus the supply of fat pigs is slightly loose at this stage. Meanwhile, the peak season was delayed due to decreasing demand and high temperatures, diminishing the price gap and drawing down pig prices.

 

It's estimated that the operating rate of slaughtering farms may up to relatively high within the year increasing the pull effect of fat pigs on standard pigs. Yet the rise in price might have a smaller rebound as the demand is less than in the same period in previous years thus the monthly average price may still fall month-on-month.