Industry News

Hog Price Running Low This Week

According to data released by the National Development and Reform Commission's Price Monitoring Centre on May 8, as of May 3, the national hog price for the week was 14.65 yuan/kg (US$2.11/kg), down 0.95% from the previous week. The loss per head of pig farming is expected to be RMB 164.13/head. (1CNY=0.1437USD)

For the reason that hog prices continue to run low, Shen Wan research report said: " The abundant supply and weak demand resulting in low hog prices, and the trend of capacity reduction may continue. Overall, the second quarter pork consumption demand in general in the off-season and holiday consumption boost sustainability is not strong enough, more importantly, the industry supply is still abundant."

The hog cycle has always been of great concern to the industry. Since 2006, China has experienced four full rounds of hog cycle.

The industry generally believes that since April 2022, China has officially entered the 5th round of the hog cycle. Compared with the previous rounds, the current hog cycle has shown obvious differences: the upward cycle has been significantly shortened and the price fluctuations have been significantly reduced. Looking at the average price of pork in 22 provinces and cities, it was RMB 18.92 yuan/kg (US$2.72/kg) at the beginning of April 2022 and started to move downwards after touching RMB 37.23yuan/kg (US$5.35/kg) in October 2022. As of now, the latest figure is 20.81 yuan/kg (US$2.99/kg).

Pig analyst Zhang Bin told reporters: "The concept of a 3 to 4 year major cycle is gradually being weakened and is being replaced by a 1 to 2 year minor cycle, or even an intra-year seasonal cycle. The duration of the hog cycle will be shortened due to factors such as secondary fattening, frozen product entry and futures, overlaid with changes in policy and capacity end, as well as the impact of trends such as an ageing population. For the aftermarket, pork prices are likely to be a little above the cost line throughout the year. From the demand side and the traditional off-season, the second half of the market may be better than the first half."