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November 29, 2011
 
China Livestock Market Weekly Review: Hog prices level off on rising demand; broiler market stable
 
An eFeedLink Exclusive
 
 
Market analysis
 
During the week in review, hog prices in most regions moderated from earlier decline amid surging pork demand, while AA broiler market was largely stable, as slaughterhouses lacked the impetus to raise prices due to poor sales of chicken products. 
 
Soft hog feed demand and ample supplies of new crops weighed on corn prices over the week. Farmers in several regions were reportedly eager to sell their crops in anticipation of a weaker market. Port prices continued to fall.
 
Weak sentiments in the global market amid economic uncertainties had continued to suppress CBOT soy prices. Meanwhile slack feed demand at home decimated the sales of soymeal. Consequently, China's soymeal prices fell sharply after regaining some footing in the previous week.
 
 
Market forecasts
 
Feed prices
 
With hog feed consumption limited due to slow herd building, along with the arrival of more northeastern new crops onto the market, corn prices should drop further in the coming period.
 
Soymeal market is expected to remain weak as high port inventories, global economic turmoil and uncertain outlook of the feed and livestock industry dampen the confidence of buyers.
 
Livestock prices 
 
Falling winter temperatures drove weekly pork demand up 4.61% to 9,620 tonnes. With hog releases unchanged, most provinces including Henan, Jiangsu and Shandong saw hog prices gradually stabilising from earlier declines. 
 
AA broiler market was largely stable, as slaughterhouses lacked the impetus to raise prices due to poor sales of chicken cut-up products. Over the week, day-old chick prices shored up on tight availability and strong demand, as integrators stepped up purchases before the restocking period for the New Year and Spring Festival holiday demand ended.
 
In the coming week, pork consumption is expected to rise further amid chilling weather. On the supply side, hog releases will likely be limited due to improved disease situation. Hog prices are therefore set to correct upwards with narrowing regional disparities. 
 
Despite lacklustre demand for chicken products, AA broiler prices are seen to strengthen in the short term as supplies remain low.
 
 
Market monitor  
  1. Jinluo Meat Products Group Co Ltd's new hog rearing base recently broke ground in Tongliao, Inner Mongolia. Upon completion, the base is expected to output 500,000 hogs every year.

  2. Henan CP Group recently opened its RMB13-million breeder hog farm in Mengjin county, Luoyang city of Henan. The 25-mu farm has an inventory of 700 hogs and an annual output capacity of 10,000 piglets to be supplied to CP Group's commercial hog farms.

  3. TQLS Group has recently imported 540 SPF hogs of Duroc, Landrace and Large White breeds from the US, its second overseas purchase in recent years. The hogs will be transferred to the company's new breeder hog farm in Tongren, Guizhou.

  4. Baishan Baijia Food Co Ltd, a RMB180-million wholly-owned company of Yurun Group specialising in Chinese and western-style cooked meat processing, will soon go into operation in Jilin's Baishan city. Equipped with an annual slaughtering capacity of 1.2 million hogs, the 160-mu integrated hog base is expected to generate RMB1.18 billion in sales revenue and RMB80 million in profits each year once fully operational. 


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