Price summary

Prices were stable to marginally higher in southern regions as local trade started to pick up. In northern regions, prices were generally stable to marginally lower.

Market analysis

China's live hog market was characterised by the following in the past week:

Hog prices rose momentarily in Hebei province. But because they differed only slightly from those in major hog consumption regions, hog sales and cross-province delivery in Hebei did not pick up. Thus, local hog prices were generally stable during the week in review.

Live hog prices in Henan province are currently higher than those in other northern regions. Cross province sales from Henan was traditionally to supply requirements in Shanghai, but in the past two months, hog deliveries from Henan to Guangdong and Hubei provinces continued to increase as prices in Shanghai have moved lower. Thus, Henan's hog prices were stable to marginally higher.

But due to only small differences in prices between northern provinces, cross province hog deliveries in the north were less active than those in southern regions.

It is customary for people in southern regions to use pork when preparing Chinese dumplings for consumption during the approaching Chinese Dragon Boat Festival in end-May. Since fewer people eat Chinese dumplings in northern China, pork demand in the south should be better than that in the north in the near term.

As of May 26, procurement prices of live hogs in Guangdong rose by RMB0.10-0.20/kg amid increased trade.

Hog prices in Hunan and Guangxi provinces were also stable to marginally higher. The presence of clenbuterol in pork has been found in Guangdong and its neighbouring provinces, except in Guangxi. Thus, hog prices in Guangxi were relatively higher in the south and only lower than those in Guangdong.

Market forecast

Despite the improved live hog prices in southern China, many farmers continued to incur losses and have adopted wait-and-see attitude to trade. As hog prices have already fallen to record lows, the approaching Chinese Dragon Boat Festival should drive up demand and hence prices in southern China in the near term. However, the festive celebration is not expected to provide any boost to hog prices in northern regions.