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November 10, 2008
 
China Livestock Market Weekly Review: Overall weakness in the livestock industry

 

An eFeedLink Exclusive

 
 

Market analysis

 

Broiler prices continued to be affected by the melamine scandal in the early half of the week while hog prices were stable.

 

Corn prices continued to fall in the main consumption regions in southern and northern China, but at a slower rate. Corn prices were stable in the main production regions in northern China.

 

Soymeal prices fell in northern China, but rose in southern China due to imbalanced distribution of soymeal across the country.

 

Prices of cottonseed meal, rapeseed meal and fishmeal continued to decline. 

 
 

Market forecast: Prices of feed raw materials to fall further; livestock rearing conditions to stay weak

 

Feed prices

 

Prices of feed raw materials will fall further.

 

Corn prices will fall on abundant supplies and weaker demand.

 

Soymeal prices will continue to fall in northern China and rise in southern China due to imbalanced levels of soy crushing activities and soymeal inventories.

 

Livestock prices 

 

Livestock prices will unlikely fall in the coming week.

 

Although the tainted egg incident has caused an upheaval in China for the past two weeks, the locals will still depend on the major livestock products for protein sources. At the same time, consumers are slowly regaining their confidence in China's meat and egg products as there has been no more report on further detection of melamine in broiler meat, pork, animal offal and so on. As such, livestock prices are seen stable to higher in the coming week unless more discriminating reports surface.

 

However, even if the poisoned egg products scandal were to blow over, it doesn't mean that situations in China's livestock industry are about to improve.

 

Hog prices have started to fall in most regions since the start of November as pork demand has weakened with the passing of the China National Day holidays. However, hog prices increased slightly in some regions due to limited supplies of hogs.

 

But, it will be difficult for hog prices to register an overall increase in prices for the whole of November as hog demand across the country will unlikely catch up with supplies.

 

Backyard farmers will continue to incur losses while profits of large-scale farms will be lower than that of the first half of the year. Such pessimistic market conditions will affect hog replenishment while farms that rear sows professionally will most likely retain excess piglets for fattening purposes.

 

Lower broiler prices in the past two weeks have weakened the profits of farms that were initially making profits and increased the losses incurred by farms that were already in the red.

 

A lack of profits and high feed costs as compared to last year's level will affect broiler replenishment interest. Broiler replenishment volume is expected to fluctuate in the coming week.


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