July 30, 2010

China's hog prices likely to stay stable amid adequate supply

Hog prices in China are unlikely to soar sharply in future due to sufficient supply, according to the National Development and Reform Commission (NDRC).

Prices of hog have halted the decline that started from December 2009, after the government launched the state reserve for frozen pork in early April 2010. To date, prices have continued to rally for seven weeks running.

As the peak season for pork consumption comes around the Moon Festival, which falls on September 22, hog prices are expected to continue to rise.

However, a higher proportion of sows in the hog population, which stands as high as 10.7%, will secure hog supplies, dampening the chance of a sharp rally in hog prices.

By the end of June the hog population had hit 437 million, of which 46.8 million were sows. The figures were down 6.7% and 4.7% respectively from those in December 2009, but indicated a more balanced relationship between supply and demand.

The commission said it expects the hog supply to stay stable, which is likely to keep hog prices stable into next year.

Traditionally, hog breeders closely follow the market development and plan hog production accordingly.