Price summary

Prices in some regions including Hubei rose by over RMB0.40/kg from the previous week.

Farmers in major hog production regions have low inventories to release supply in local markets, causing difficulties for hog traders to make procurements especially of better quality hogs.

Market analysis

Commercial exhortation of a folklore, which falls on the seventh day of the seventh month in the Chinese lunar calendar, resembling the modern day Chinese Valentine has drawn couples to restaurants celebrating, boosting the demand for pork and hence live hog prices.

During the week in review, typhoons once again severely disrupted hog operations in some major hog production regions including Hunan province. A major expressway in the region was destroyed and required repairs, disrupting cross-province hog deliveries.

Recent high temperatures have limited hog deliveries from northern to southern regions. Consequently, authorities in Guangdong province have eased restrictions on hogs entering Guangdong from Guangxi province, in a bid to meet increased local demand for pork.

In light of Guangdong's reduced hog supplies, local officials have also signed agreements with major hog farms and live hog associations in Hunan and Guangxi to ensure a steady supply of live hogs to Guangdong. This has lent support to hog prices in the southern regions.

Market forecast

During the first half of this year, hog farmers in China incurred significant losses, leading to continued reductions in hog inventory levels. Consequently, they have limited supply to release into the market, driving up domestic hog prices of late. With low supplies and more pick up in demand, live hog prices in China should continue to improve in the weeks ahead.