As 10 moves into its latter half, the National Day holiday is over, and the expected seasonal rise in pig prices has failed to materialize. The market has continued its previous sluggish trend, with prices successively falling below last month-end’s low of 9.96 yuan/kg. The price center has continued to move down. In particular, the market’s “imbalance between production and sales” has persisted this month, weighing on pig prices and pushing the price center down to 9.29 yuan/kg. Compared with the beginning of the month, pig prices have fallen by nearly 9.4% in total. The live pig market has fallen into a “quagmire,” and the pattern of “declines being easier than rises” continues!
The key reason for the pig-price peak season failing to materialize this time is that the reduction in supply has fallen short of expectations; instead, supply has shown a trend of “increasing more and more”! On the one hand, this month, the planned shipment volume of major pig-farming companies has increased month on month, with monthly shipment plans at 1508.18 ten thousand head, up 1.91% from last month, and the shipment base remains high. On the other hand, production capacity was drawn down slowly in the earlier period, and the pace of live pig shipments has been slow this month. Monthly shipment plans are behind schedule: as of the 21th, institutions’ survey found that completion of this month’s shipment plans was around 61.96%, and supply pressure remains considerable. In addition, frozen pork inventories are high, and frozen pork is being released in stages. With reports of more disease among live pigs, diverse smallholder farms are more willing to ship, further suppressing shipment performance by major pig-farming companies and intensifying market supply pressure!
However, supply has increased rather than decreased, while demand has fallen rather than risen! After the National Day holiday, the festive atmosphere faded and people’s movement declined, leaving urban demand sluggish. Meanwhile, household demand in the domestic market has been slow to recover, substitute consumption has been widespread, and pork trading has been lackluster. White carcass shipments in the downstream market have been slow, slaughterhouse orders have been limited, and operating rates have remained low! Some slaughterhouses have suffered substantial losses because the price spread between live pigs and carcasses is insufficient. Slaughterhouses have been strongly inclined to push purchase prices down, further reinforcing the market’s weak trend!
Although the sow population fell to 3602 ten thousand head at the end of the third quarter, this is unlikely to ease the temporary supply-demand imbalance. Moreover, based on the pace of sow sales and changes in the sow population at the beginning of the year, supply pressure for live hogs is still expected to remain high in the period ahead. On the demand side, the pattern of peak-season consumption being lackluster has become commonplace, and marginal demand support may fall short of expectations. In the short term, the live hog market is unlikely to find support and may remain subdued, fluctuating as it bottoms out.
According to data monitoring, amid price adjustments driven by supply and demand, the national average price for live hogs sold is expected to be 9.23 yuan per kilogram on 10/28. Going forward, attention should be paid to changes in the pace of market buying and selling, especially sales by large-scale hog producers and the movement of chilled pork in downstream markets. In theory, hog prices may have little chance to improve by the end of 10 month. What do you think?