September 29, 2009
China's pork prices unlikely to rise in Q4
There is little likelihood that hog prices in China will increase sharply in the coming months as the government's frozen pork reserves can be used to stabilise the market, said Qiao Yufeng, vice chairman of the China Animal Agriculture Association.
As pork consumption reaches its peak in the fourth quarter, prices will rise steadily, Qiao said. However, the frozen pork reserves should maintain sufficient market supply and thus keep the surge in pork prices in check.
The central government launched a frozen pork reservation program in June, citing the reason for it as being that the price ratio between pork and corn prices had slipped to 5.89:1, the fourth consecutive week that the ratio stood below the benchmark 6:1.
Despite the rise in pork prices, Qiao said pig farms will find it hard to expand their profits due to increasing feed costs.
Meanwhile, hog prices should stabilise at the end of this year when the number of slaughtered pigs increases.
