April 20, 2004
 

 

Market Findings Show Prices of Most China's Livestock Products Rose in March

 

An eFeedLink Exclusive Report
 

China's Livestock and Veterinary Bureau conducted a study of 450 trade markets in March. Findings showed that there had been a rise in prices for corn, live hogs, cattle, and sheep products, as compared to the previous month. And when weighed against prices in the same period last year, the increase was rather significant. Poultry products like eggs and live chicken reported lower prices than February, while prices of day-old chicks fell when compared to year 2003.

 

1.  Live Hog Products

 

In the month of March, piglet prices in China averaged at RMB 10.98/kg. This is 11% higher than February, and reflected a rise of 38% as compared to the previous year. With prices exceeding RMB10 /kg, the increase is the greatest in recent years. Among the various regions, Sichuan recorded the lowest price of RMB 7.52 /kg, while Xinjiang topped the list at RMB 14.25 /kg.

 

Live hog prices averaged RMB7.84, an increase of 4.6% compared to February, and 34.5% compared to the previous year.

 

Live hog prices averaged at RMB 7.84, a 4.6% rise from February and an increase of 34.5% compared to 2003.

 

Pork prices, on the other hand, registered an average of RMB 12.65. This is a 2.9% increase from February, and up 26% as compared to the year before. Heilongjiang reported the lowest rate of RMB 10.07, while the highest price of RMB 16.20 was found in Shanghai. The five main producing regions - Hebei, Shandong, Henan, Hunan and Sichuan provinces - averaged RMB 12.51 in pork prices, which was 1.1% less than the national average. The sales regions - Shanghai, Guangdong, Fujian and Hainan - recorded an average price of RMB 13.84, 9.4% higher than the national average.

 

The price trend of live hog products this year is vastly different from previous years. Prices usually began to stabilize in March, gradually picking up after the month of July. In 2004, however, prices started to recover in March, barely a month after stabilizing. This is especially evident in the prices of piglets, which registered a startling double-digit growth compared to February. The prices of piglets in some areas were even higher than pork prices.

 

This trend could be attributed to various reasons. For one, pig farming generated sound profits. Farmers could earn more than RMB 100 per pig, and this continues to be the driving force behind pig rearing. Secondly, with the outbreak of the highly contagious bird flu, consumers had turned to safer meat like pork, beef and mutton. This has, in turn, led to an increase in live hog and pork prices. It is perfectly reasonable for live hog prices to increase in line with the rising costs of feed ingredients. In fact, a modest increase in the second quarter would even be considered normal. However, an accelerated hike in piglet prices is definitely unusual. If the rise in piglet prices continues to rise faster than that of live hogs and pork, it would eventually have adverse repercussions on the production of live hogs.

 

2.  Poultry Products

 

At RMB 9.29, the price of live chicken fell 0.4% compared to February, and rose 7.2% from the year before. At RMB 9.36, the price of foreign packaged chicken was 1.5% higher than the month before, and up 4.2% from 2003. Commercial day-old layer chicks cost RMB 1.90 per chick, an increase of 15.9% compared to February, and a fall of 5.9% in relation to the previous year. The rate for commercial day-old broiler chicks was RMB 1.84 per chick; an increase of 18.7% compared to the month before, and a decline of 0.3% compared to the previous year.

 

The prices of day-old chicks rose rather rapidly during the month. This is a clear indication that the poultry industry has gradually emerged from the effects of the bird flu outbreak and is slowly picking up. Market prices also begin to stabilize. On the whole, the rising prices of poultry products are unlikely to change, though they might fall slightly in the second quarter.

 

3.  Beef and Mutton

 

At RMB 16.24, prices of beef increased 0.4% compared to February, and by 8.1% compared to the previous year.

 

At RMB 16.47, prices of mutton rose by 1% from February, and up 2.3% compared to the year before.

 

In recent years, prices of beef and mutton have basically risen by a small margin every month: increasing from RMB 12.63 and RMB 14.45 respectively in 2000, to RMB 15.26 and RMB 15.99 respectively in 2003. After December 2003, prices have remained above RMB 16. Despite the prevailing rising prices of feed ingredients, the impact on grass-fed animals is not substantial. Hence prices will continue to increase amidst stability. 

 

4.  Animal Feed

 

At RMB 1.31 per kg, the price of corn has grown by 4% compared to February, and by 18.3% in relation to the previous year. The growth of the animal production industry was one of the main reasons. With the gradual emergence of the southern sales regions from unfavorable factors like the bird flu outbreak, a steady demand for corn was also on the rise. Thus, it is forecast that corn prices will maintain the upward trend in the near future.