December 22, 2008
China Livestock Market Weekly Review: Livestock prices seen to rise before the Spring Festival


An eFeedLink Exclusive


Market analysis


Hog prices fell during the week in review while broiler prices rose.


Corn prices fell on poorer demand. Many soy crushers suspended operations in an effort to prop up soymeal prices.


Prices of cottonseed meal, rapeseed meal and fishmeal declined on weaker demand.  



Market forecast: Feed prices to fall further; livestock replenishment to fall amid depressing market situations


Feed prices


Prices of feed raw materials will continue to fall. Amid the global credit crunch, ample supplies of corn in China and lower international prices compared with corn prices in China, buyers stayed on the sidelines.


More soy crushers are expected to resume crushing activity in the coming week. Increased soymeal supplies will therefore cause soymeal prices to fall.


Prices of cottonseed meal, rapeseed meal and fishmeal will fall further on further weakness in demand.


Livestock prices 


Hog prices fell during the week in review, having risen consecutively for four weeks, as pork demand started to fall in southern China.


Most of the consumers in Guangdong province have already purchased sufficient pork for the production of waxed meat. At the same time, pork demand by ex-factories workers who had returned to their home villages after the loss of their jobs in the cities has fallen as these ex-factory workers no longer have the means to afford expensive meat products.


However, lower hog prices did not have much impact on hog replenishment rate as backyard farmers remained pessimistic with the market outlook while large-scale hog farms were reluctant to increase replenishment amid market uncertainties.


More factory workers and students are expected to return to their home villages starting early January in order to celebrate the Spring Festival with their families. This will lead to lower pork consumption in the cities, but will bring about higher pork consumption in the rural areas, including the main hog production provinces.


The outbreak of bird flu in Jiangsu had little or no impact on broiler prices. In fact, broiler prices were higher in most regions. This is because the outbreak happened among layers instead of broilers. Also, the outbreak happened two to three weeks ago and hence the market effect has already been muted in the past week.


At the same time, the recent outbreak has not resulted in any loss of human lives. Consumers were not much affected with consuming broiler meat.


Broiler prices in Guangdong recovered from the earlier slide caused by a ban to supply broilers to Hong Kong after bird flu was detected there.


Broiler prices have stayed high despite consecutive outbreaks of bird flu in China and Hong Kong. However, this does not mean that broiler rearing interest has increased. Most farmers expect broiler demand will likely fall in early February after the Spring Festival. Broiler replenishment volume will therefore decline. In addition, most broiler farmers have only begun to make some profits in recent weeks. Fear of losses and worries of the declining economic situation in 2009 will cause broiler farmers to be cautious with replenishment.
All rights reserved. No part of the report may be reproduced without permission from eFeedLink.