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December 29, 2008
 
China Livestock Market Weekly Review: Livestock prices may fall during the festival holiday season

 

An eFeedLink Exclusive

 
 

Market analysis

 

Hog prices were stable during the week in review while broiler prices struggled to move upward.

 

Corn prices stabilized as the government purchased more corn for its reserves. Some regions like Guangdong even reported a big surge in corn prices.

 

Soymeal prices rose as supported by higher CBOT soy prices. Meanwhile, prices of rapeseed meal, cottonseed meal and fishmeal fell on weaker demand. 

 

 

Market forecast: Feed prices seen softer; livestock prices seen weaker on poor demand

 

Feed prices

 

Despite a bigger volume of purchase by the government, gain in corn prices is unsustainable as overall demand from the deep corn processing and livestock sectors will remain weak.

 

Near-term soymeal prices will be influenced by CBOT soy prices while prices of rapeseed meal, cottonseed meal and fishmeal will stay weak on sluggish demand.

 

Livestock prices 

 

Hog prices rose during the week in review amid increased demand for pork in the New Year holiday season and a fall in release volume in some regions.

 

Hog prices are seen mixed in the near-term.

 

Prices may rise in some regions with increased hog purchases prior to the Spring Festival in late January and a disruption in supply due to transportation difficulties in winter.

 

However, prices may fall in regions where there are build up in hog inventories due to difficulties in cross-province trade in wintry weather.

 

Apart from hog prices, hog replenishment interest and actual replenishment rate in recent weeks have indicated that most hog farmers are worried about market situation in 2009. Although hog replenishment is active in Southern China, overall replenishment rate is weak throughout the whole of China.

 

Broiler prices were not affected by the outbreak of bird flu during the week in review. However, it would be difficult for broiler prices to rise in the New Year holiday season.

 

Most market participants have anticipated broiler prices to climb amid higher broiler meat demand and consumption in the holiday season. Hence, many broiler farmers have replenished actively previously. This would result in a surge in broiler release volume in the coming week and therefore cause broiler prices to fall. 

 

Meanwhile, broiler chick prices continued to fall in the past week. Despite lower prices, broiler chick replenishment rate fell. Broiler farmers were cautious with replenishment as broiler consumption has been affected by the general economic slowdown.

 

At the same time, lower pork prices have also prompted consumers to prefer pork to broiler meat. Prices of broiler meat products will likely stay high for the time being as broiler farmers, slaughterhouses, as well as meat retailers is constrained by potential losses to further lower prices.
 
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