October 11, 2022

Pig farmers in China to see return of profitability in Q4 2022

Chinese pig farmers, which have been recording sluggish sales since last year, are expected to return to the black in the fourth quarter of this year, as the price of live hogs soared to a 17-month high after the National Day holiday.

The average price of a live pig was ¥26.57 (US$3.74) per kilogramme on October 9, the highest since May last year and up 8.3% from before the week-long National Day holiday that begun on October 1, according to data pig farming industry platform Zhuwang released on October 10. The price rose 13.8% from a month earlier and 140.45% from a year earlier.

The jump in hog prices comes despite the National Development and Reform Commission released state pork reserves on September 30 for the fourth time this year to a total of nearly 87,100 tonnes. The previous three released contained the raising pork prices.

"Residents traveling during the National Day holiday boosted pork consumption, and rising pork prices indicate a short supply of medium and big pigs," a pig farming industry analyst told Yicai Global. "Hog prices are going upward in a new cycle. November and December are peak seasons, so stocking up before the New Year and Spring Festival will gradually affect pig prices."

But the market has diverging opinions about how much pork prices will increase, the analyst said, adding that the falling piglet prices show the market's concern about the pig cost in the future.

New Hope Liuhe sold nearly to 1.2 million pigs last month, up 23.8% from August and 24.7% from a year earlier, the Chinese agricultural giant announced. Its revenue was ¥3 billion (US$421.8 million) in September, an increase of 38% from the previous month and 152% from the same period a year ago.

Twenty-five pork stocks dropped 13% on average last month, despite pig prices remaining stable. Longda Foodstuff Group was the only one that posted a growth, edging up 1.4%.

- Yicai Global