July 22, 2012

Despite falling prices last week, China's wholesale pork have shown signs of stabilising as stockpiling has hindered prices from falling further, the Ministry of Commerce said Wednesday (July 18).

The average wholesale price was CNY20 (US$3.2) a kilogramme, down 0.7% from a week earlier, the ministry said.

Prices monitored by the ministry have hovered around CNY20 (US$3.2) per kilogramme for more than a month, after declining for nearly three months, with prices supported by state stockpiling since May.

Last week's prices were still down 23.5% from a year earlier, the ministry said.

High domestic hog inventories and a severe drought in the US sent China's soymeal prices to their highest level since July 2008. Soymeal is commonly used to feed hogs.

China produced 25.88 million tonnes of pork in the first half of the year, up 5.9% from a year earlier, data from the National Bureau of Statistics showed. Hog inventories stood at 455.26 million heads as of the end of June, up 3.5%.

The high inventories will ensure robust demand for animal feed, including corn and soymeal, analysts said.