December 19, 2011
China Livestock Market Weekly Review: Rising pork demand props up hog market; broiler prices stabilise
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Over the week, hog prices gained strongly as dwindling hog releases failed to keep up with rising pork demand, while broiler prices edged down before stabilising toward week's end.
Corn prices rebounded in most regions on surging demand and news of government stockpiling programme. Northeastern deep processors slightly raised offer prices while port prices soared as feed millers boosted restocking while traders hoarded.
Soymeal market remained weak as CBOT soy futures continued to decline on worries over Europe debt crisis, although losses were limited by forecasts of a dry crop weather in South America. Over the week, China's soymeal prices were in the range of RMB2,720-3,100/tonne.
Strong replenishment interest among corn users in preparation for the Lunar New Year holiday should hold corn prices firm in the near term.
CBOT soy futures closed higher last Friday on growing concerns that dryness in some South America's crop areas will reduce production there. Chinese soy processors are therefore motivated to lift soymeal prices in the coming period.
Weekly pork sales jumped 6.99% to 10,363 tonnes, as southern food processors ramped up cured meat production ahead of the Lunar New Year holiday, while rapidly falling temperatures bolstered pork consumption in the north. Excluding Sichuan province, hog prices gained strongly across regions as dwindling hog releases failed to keep up with rising pork demand.
Slaughterhouses cut broiler purchase prices early in the week amid releases of the first batch of New Year's stocks and the softening of chicken product prices. Latter half of the week saw broiler prices levelling off as market supplies remained inadequate. Meanwhile, a slump in day-old chick demand pushed many hatcheries into the red.
In the week ahead, tightening hog supplies and growing demand for pork should continue to underpin hog market.
Broiler market looks upbeat in the short term as pre-festive demand is expected to gain pace.
Jiangxi Sentai Agricultural Hi-Tech Development Co Ltd is set to build southern China's largest layer rearing base in Jiangxi's Fuzhou city, with an annual capacity of one million birds. Upon completion, the 500-mu base, which will fully import its layer stocks and production processes, is able to produce over 200,000 commercial chickens and 20,000 tonnes of eggs per year.
Shandong Yisheng Livestock & Poultry Breeding Co Ltd, Shandong Minhe Animal Husbandry Co Ltd, Shandong Liuhe Group and Shouguang Tianhui Food Co Ltd have jointly invested RMB60 million in a 360,000-bird grandparent breeder layer rearing base in Xiaoxian, Suzhou of Anhui province. The 210-mu base will include four rearing farms, two quarantine sites and a hatchery.
- Fujian Sunner Development Co Ltd aims to set up a RMB2.7-billion integrated broiler base in Pucheng county of Fujian province, which is designed to produce 120 million broilers annually. The base, which will incorporate 28 breeder broiler farms, 66 broiler farms, two hatcheries, two broiler processing plants, a feed mill as well as logistics facilities, is slated to finish in about three years.
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