December 27, 2011
China Livestock Market Weekly Review: Southern China hog prices slip back; higher releases soften broiler market
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During the week in review, southern hog prices fell back as the region's meat curing season waned, while higher releases and slumping sales of chicken products softened the broiler market.
Northeastern corn market strengthened further as deep processors stepped up purchases; while southern port prices retreated amid higher stock arrivals and the end of pre-holiday replenishment.
China's soymeal prices ticked up over the week to reach RMB2,760-3,180/tonne, tracking higher CBOT soy futures amid South American weather concerns. However, the rebound was capped by large domestic soy supplies and weaker-than-expected restocking efforts, as feed millers worried that post-festive feed demand would be poor.
With government's stockpiling policy basically establishing the bottom prices, corn trade should accelerate in the near term as farmers are motivated to sell.
With demand staying tepid and short-term supplies set to rise as crushing rates pick up, soymeal prices lack the support to push higher in the short term.
Weekly pork consumption gained 5.67% to 10,951 tonnes, mostly driven by northern demand as cured meat production in the south had largely completed. With more hogs coming onto the market, this led to a decline in Guangdong's hog prices, while those of other regions continued to climb.
AA broiler market softened due to higher releases of New Year's Day birds and weak sales of chicken products. Meanwhile, loss-making hatcheries rushed to raise day-old chick prices amid signs of recovering demand, as farms began restocking for post-Lunar New Year demand.
In the following week, pork demand is seen stronger in the colder northern and central regions relative to the south. Hence hog prices should continue to show regional disparities.
In the near term, AA broiler market is seen to consolidate lower as pre-festive demand is not particularly strong while more New Year's Day broilers are set to be released.
Yurun Group's RMB300-million hog processing line went into operation in Henan's Qingfeng county. Capable of slaughtering two million hogs per year, the plant is expected to drive the local hog and feed businesses, bringing in RMB1.56 billion in hog revenue and RMB600 million in feed sales annually.
Wens Group has signed an agreement to build a RMB250-million hog farm in Feidong, Hefei city of Anhui. Once fully operational, the farm is set to produce 400,000 commercial hogs per annum.
- Jintaiyang Agricultural Development Co Ltd has recently imported 288 Danish breeder hogs to be placed in its farm in Xinzhou District, Hubei's Wuhan city. The company plans to grow the foreign stocks to 600-700 head by the end of next year, providing around 3,500-4,500 grandparent-stock sows each year. When full capacity is reached, the 83-mu farm will be able to yield 12,000 breeder hogs annually.
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