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24

2022

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09

Back to the High Price in July, China's Pig Prices Rose for Three Weeks Despite Official Releasing Reserves

Source:

OIG+X

Hog prices rose for three consecutive weeks in Sept, driving pork prices to increase but in a limited range due to weak end-consumption. Piglet prices continued to decline. Farmers are cautious in buying piglets under the high feed price and policy planning although the breeding continues to make profits.

 

China's pig prices have surged since late Aug after the price fluctuations before. Although the downstream demand has cooled down after the Mid-Autumn Festival, pig prices still went at a high level returning to the high point in July because of the price gouging of farmers by holding back their sales and secondary fattening pigs. Weak downstream demand leads to the operating rate of slaughtering houses falling to 22.34%, down 1.40 pp from the pre-holiday period. Meanwhile, the state planner has made efforts to prevent pig prices from soaring by releasing pork reserves and summoning pig companies for talk.  

 

Since July, policy meetings have been held many times to discuss the pig market situation. On Sept 8, Sept 18, and Sept 23, the authority released 37,700 tons, 15,000 tons, and 14,400 tons of pork reserves successively. It's estimated that the pork reserves have a minor short-term impact on the price trend based on the quantity announced and planned.

 

According to the data by the Ministry of Commerce, hog prices rose for three consecutive weeks in Sept, driving pork prices to increase but in a limited range due to weak end-consumption. Piglet prices continued to decline. Farmers are cautious in buying piglets under the high feed price and policy planning although the breeding continues to make profits.

 

Outlook:

It's expected that hog supply and demand will increase bringing pig prices bullish in Q4. The average price of big pigs sold in late Sept will rise. Southern China will embrace the peak consumption season for medium and big pigs from Nov to Dec.