In China’s live hog market, prices have followed a “rise first, then fall” pattern so far this month. At the start of the month, buoyed by the holiday atmosphere, large-scale hog producers reduced their marketings, and the average domestic price of standard hogs briefly rebounded from 9 month-end 9.96 yuan/kg to 10.25 yuan/kg. Unfortunately, the early-month price rise was short-lived. As the pace of marketings by producers returned to normal and the holiday atmosphere weakened, downstream purchasing demand cooled, and hog prices gradually moved lower. In particular, after National Day, consumption fell back in line with its usual pattern, pressure on producers rose sharply, and both independent producers and large-scale hog enterprises became more willing to sell hogs to realize cash. Hog prices broke through to the downside, and the market remained sluggish, leaving the live hog market mired in a “quagmire” once again!
Currently, the average price of standard-weight live pigs in China has fallen to 9.79 yuan/kg, down 0.46 yuan/kg compared with the beginning of the month. Pig prices have broken below key levels and declined, and market sentiment is bearish. In the short term, prices may remain weak as they seek a bottom!
On the one hand, plans for live pig sales are relatively high, increasing market supply capacity! In particular, sow inventories 10 months ago increased by 4 ten thousand head month on month, and production efficiency improved significantly. Meanwhile, last month, large-scale pig enterprises fell short of their planned sales targets, with some postponing their sales plans. This month, supply faces the combined impact of multiple factors! Institutions estimate that the month-on-month increase in average monthly sales by large-scale pig enterprises may reach 2.45%.
In addition, recently, temperatures have fluctuated sharply across northern and southern regions, increasing the risk of disease at pig farms. Meanwhile, the average weight of market hogs has risen, and the price spread between standard-weight and heavyweight pigs has narrowed. Residents and pig farmers lack confidence in a bullish market outlook. In particular, pig finishing has been unprofitable for a prolonged period, and the market faces a need to recover funds, prompting pig farmers to increase their willingness to sell. Oversupply has become more pronounced!
On the other hand, seasonal peak demand has recently weakened. After the National Day holiday, consumer demand has remained sluggish, with weak domestic sales and urban demand! Changes in residents’ diets have reduced their willingness to consume pork, while demand for beef and mutton, poultry, and eggs has recovered, limiting the purchase and sale of pork carcasses in the downstream market. In addition, reduced urban population movement has cooled demand for group catering in various regions. Urban demand has remained sluggish, orders at major slaughterhouses have been limited, and operating rates have hovered at low levels. The operating rate among sampled slaughterhouses is 30.11%, with no support from a recovery in demand!
Based on this analysis, changes in supply and demand are keeping pig prices in a volatile downward trend. However, the market also has underlying support. Going forward, attention should be paid to changes in the pace of sales by large-scale pig farming companies after the center of pig prices declines, as well as shifts in sentiment toward secondary fattening in downstream markets. According to cited data monitoring, in response to slaughterhouses’ price adjustments, the forecast is that on 10 month 17, the quoted price for live pigs of the three-way crossbred type will be 9.79 yuan per kilogram. Pay close attention to changes in market buying and selling!
Overview of hog prices across provinces and regions in northern and southern China (for industry exchange reference only)