September 16, 2010

China's pork prices poised to rise in September

Pork prices in China were at a record high during the first week of September with the national pork average wholesale price reaching RMB17.21 (US$2.55) per kilogramme - an on-year increase of almost 8%.

The Mid-Autumn festival and National Day holiday in September will stimulate pork demand. Plus, feed and raw materials such as corn and wheat will also maintain high operations and stimulate a rise in pork prices. Therefore, pork prices may start a new rising price trend in late September and October.

Breeding stock fell and the numbers in July saw an on-year drop of 3.7% head. As pork prices continue to rise, market availability of the livestock may start to fall, hence, the supply in such a tight situation may continue into the late fourth quarter.

China's demand may exceed supply at the height of the pork season. Judging by the current situation, this year's pork wholesale prices can reach RMB19 (US$2.82)/kg but will not exceed the RMB23 (US$3.41)/kg level seen in 2008, analysts said.