October 27, 2008
China Livestock Market Weekly Review: Animal replenishment unlikely to pick up in the coming weeks


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Market analysis


Hog prices were stable during the week.

Broiler prices fell in southern China but stayed firm in other regions.

Corn prices fell in most regions while soymeal prices climbed amid higher CBOT soy prices and increased soy purchases by the China government.

Prices of cottonseed meal, rapeseed meal and fishmeal continued to fall.


Market forecast: feed prices to fall; animal replenishment to be sluggish


Feed prices


Prices of feed raw materials will continue to weaken.

With the global financial turmoil affecting bank credit and abundant corn supplies in China, corn prices will be under more downward pressure.

Soy futures are seen weaker in the near-term. Thus, soymeal prices are seen to trend lower in China.

Influenced by lower soymeal prices, prices of other protein meals like cottonseed meal, rapeseed meal and fishmeal will also fall. 




Hog supplies will remain stable in the coming weeks should there be no major outbreaks of hog diseases. At the same time, hog demand will also stay stable. Hog prices will therefore hover near current levels due to stable demand and supply.

Hog replenishment remained weak during the week in review as backyard farmers who were still incurring hog rearing losses were still reluctant to replenish actively.

Lower piglet demand resulted in declining piglet prices in recent weeks. This led farms that are rearing sows commercially to suffer losses as well. Poor piglet demand caused some sow farms to retain excess piglets for fattening purposes. However, a lack of cash flow and land space will leave these farms with no choice but to eliminate more sows in the near-term.




Broiler prices are seen stable in the coming weeks.

However, broiler replenishment will be weak as broiler rearing confidence will be affected by still-high feed prices and increased disease threats brought about by lower weather temperature. Broiler replenishment activities are expected to be more active only among farms that are bound by contract-farming agreements.

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