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2022

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Recent China’s Pig Price Analysis

Source:

According to the NDRC, from Oct 10 to 14, the average weekly retail price of lean meat in 36 large and medium-sized cities rose by more than 40% YoY, entering the first level warning range of excessive rise. In order to effectively ensure the supply and stable price of live pigs in the market, the state will launch the sixth batch of central pork reserves this year on Oct 21, 2022, and 20,000 tons of frozen pork in the central reserve will be put out of the warehouse for auction trading.


1. Chinese domestic pig price
According to the NDRC, from Oct 10 to 14, the average weekly retail price of lean meat in 36 large and medium-sized cities rose by more than 40% YoY, entering the first level warning range of excessive rise. In order to effectively ensure the supply and stable price of live pigs in the market, the state will launch the sixth batch of central pork reserves this year on Oct 21, 2022, and 20,000 tons of frozen pork in the central reserve will be put out of the warehouse for auction trading.

 

Before the Mid Autumn Festival and the National Day, in order to ensure the stable supply and price of live pigs in the market, the central and local governments released 200,000 tons of pork reserves in Sept. On the whole, although the rise in pork prices was significantly lower than the first wave of the rise in spring and summer this year, it still entered the "first level warning range of excessive rise".

 

Since Sept, the price of Chinese domestic piglets, live pigs and pork has continued to rise slightly. After Oct, the domestic pig price has set off a round of strong rise. During the National Day, the pig price in various parts of the country has continued to rise. After the festival, the terminal demand has declined, but it has not stopped the rising trend of pig prices.

 

According to the MARA, from Oct 10 to Oct 16, 2022, the average purchase price of pigs of designated slaughter enterprises was 27.34 yuan/kg, up 6.2% MoM and 98.8% YoY. The average wholesale price of pork was 34.75 yuan/kg, up 5.9% MoM and 86.0% YoY.

 

On Oct 19, the price of live pigs in some areas had risen above 30 yuan/kg, and the average purchasing price of pig nationwide was 27.92 yuan/kg, up 0.62 yuan/kg on a month on month basis yesterday, and 14.17 yuan/kg compared with 13.75 yuan/kg in the same period in 2021. On the whole, the price of pigs across the country is rising.

 

With regard to the recent strong rise in pig prices, Wang Zuli, the chief expert on pig industry monitoring and early warning of the MARA, said that from a micro perspective, first, the holiday effect of the National Day holiday has significantly boosted pork consumption; second, the recent temperature drop has also driven meat consumption; third, the market also has expectations for the upcoming New Year's Day and the Spring Festival, and there has a phenomenon of keeping the pigs and refusing to sell.

 

As for macro factors, since April, there has started a new round of pig cycle, and pig prices have shown an overall upward trend. Compared with the first half of the year, the second half of the year is obviously a peak season for pork consumption. Superimposed with holiday factors, it has a significant driving effect on pork consumption.

 

Lin Guofa, research director of Brick, said that the rise in pig prices was also related to the support of feed prices. The core of the rise in feed prices is the increase in feed demand. It is mainly due to the improvement of breeding stock, the general pressure of farmers on pig stock, and even a large number of secondary fattening, which increases the demand for feed.

 

2. Import
As for the imported pork, according to the latest statistics of the GACC, from Jan to Aug, China imported 4.757 million tons of meat (including offal), in which 1.79 million tons of pork (including offal) was imported. In Aug alone, the import of pork (including offal) has rebounded, with the actual import of 230,000 tons, up 9.5% MoM.

 

With the industry's expectation of pork prices and the arrival of the stock cycle of the 2023 Spring Festival (Jan 22), which is earlier than previous years, the imported pork will continue to grow steadily in the fourth quarter, and the market will recover more obviously.