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15

2022

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10

China live pigs analysis in Q3

Source:

OIG+X

At present, the price of live pigs has been in an excessive rise range, and the risk of price fluctuation has increased significantly.

At present, the price of live pigs has been in an excessive rise range, and the risk of price fluctuation has increased significantly.

 

According to the data released by the National Bureau of Statistics on Oct 14, the price of DLY live pigs rose 9.5% in the first half of Oct compared with the second half of Sept; In Sept, the national consumer price rose by 2.8% YoY. In food, the price of pork rose by 36.0%, affecting the CPI rise by about 0.45 percentage points.

 

CPI data in Sept:

On a MoM basis, CPI increased 0.3% from a 0.1% decline last month. Among them, food prices rose by1.9%, 1.4 percentage points higher than that of last month. In terms of food, the demand for pork consumption picked up seasonally. In addition, some farmers were reluctant to sell under the bullish expectation, and the price continued to rise. However, due to measures such as the release of pork from the state reserve, the rising trend slowed down in the middle and late days, with an average monthly increase of 5.4%. From a YoY perspective, CPI rose by 2.8%, 0.3 percentage points higher than that of last month. Among them, food prices rose by 8.8%, 2.7 percentage points higher than that of last month, affecting CPI growth by about 1.56 percentage points. In food, the price of pork rose by 36.0%, 13.6 percentage points higher than that of last month.

 

The main reason for the recent rise of live pigs price was that some farmers have irrational behaviors such as keeping the pigs and refusing to sell, with the action of secondary fattening, which have reduced the market supply. At present, the number of breeding sows, newborn piglets and fattening pigs in China has increased for several consecutive months, and there is no shortage of pigs on the whole. Once the pigs are slaughtered and the second fattening pigs are sold together, the pig price may fall rapidly in stages.

 

Since the National Day holiday, the pig price has continued to rise rapidly and set a new high this year. Considering that the supply side is still at a low level and Q4 is the traditional peak consumption season, OIG+X believes that the pig price may continue to rise. According to the data of breeding sows, the supply of live pigs will continue to decrease, and the demand will weaken after the National Day holiday. It is expected that the price of live pigs will have a certain callback after the National Day holiday, but due to the decrease of supply, the callback range is limited.