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27

2023

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02

The Price of Pigs Is Expected to Recover, and Multiple Factors Are Expected to Support the Price

Source:

OIG+X

Usually, after the Spring Festival, the price of pigs has a downward range. The main reason is that the pork stock before the Spring Festival is sufficient, the pork is more easy to store, the consumption after the Spring Festival enters the off-season in a short time, and the residents are less motivated to buy pork. But with the COVID-19 situation stabilizing, social and economic activities returning to normal, consumer demand will be released. In addition, related factors such as the market expectation of frozen pork reserve are expected to support pig prices, and pig prices are expected to recover.

 

Usually, after the Spring Festival, the price of pigs has a downward range. The main reason is that the pork stock before the Spring Festival is sufficient, the pork is more easy to store, the consumption after the Spring Festival enters the off-season in a short time, and the residents are less motivated to buy pork. But with the COVID-19 situation stabilizing, social and economic activities returning to normal, consumer demand will be released. In addition, related factors such as the market expectation of frozen pork reserve are expected to support pig prices, and pig prices are expected to recover.

 

In terms of production, the pork supply in the H1 was basically the same as last year. From the perspective of pig stock, according to the statistics of the National Bureau of Statistics, the number of pigs on hand at the end of 2022 was 452.56 million, up 0.7% YoY. The pork supply in the first half of the year was relatively stable based on the consideration of frozen pork reserve, price pressure on the farms, pork import and other factors.

 

From the perspective of consumption, the recovery of consumer demand will support the price of pigs. With the comprehensive recovery of social and economic activities, and the comprehensive launch of group consumption such as schools, pig prices will be strongly supported. The temperature rises in March and April, and the digestion of the pork in the early stage is completed. The pork consumption will enter the rising channel, and the pig price is expected to usher in an inflection point.

 

From the perspective of policy guidance, frozen pork reserve will help stabilize the supply and demand of pork market. On Feb 6, the NDRC released that it would launch the frozen pork reserve, which would guide the pork market expectations. Generally, pork processing enterprises and traders will choose to store a certain amount of frozen meat when the pig price is low at the beginning of the year to earn the profit from the difference when the pig price rises in the future.