Since June, the supply of commodity pigs has been tight, and prices have continued to rise. Experts believe that-
Pig price rebound is difficult to exceed previous highs
Our reporter Huang Junyi
Every year in May and June, it has always been the time node for the seasonal rebound of pig prices. There is a certain room for seasonal price increases, and some of them may even rise faster. On the whole, the high point of the pig price may have passed, and it may rise faster in some time thereafter, but it is unlikely to exceed the previous high point.
After entering June, the national pig price continued to rise, causing widespread concern among consumers. Can this wave of recovery continue? In this regard, the reporter interviewed industry experts.
"Every year in May and June, it has always been a time node for the seasonal rebound of pig prices. The current supply of commodity pigs is still tight. In addition to the catering and resumption of production, some slaughter enterprises prepare for the Dragon Boat Festival. The demand for fresh pork has increased, and the price of pork has increased. It is normal for He pig prices to rebound seasonally." On July 1, Zhu Zengyong, an associate researcher at the Beijing Institute of Animal Husbandry and Veterinary Medicine, Chinese Academy of Agricultural Sciences, told the Economic Daily reporter.
The monitoring data of the Ministry of Agriculture and Rural Affairs showed that the price of live pigs in the national fairs fell from RMB 37.51/kg in the third week of February to RMB 28.49/kg in the third week of May, a cumulative decrease of 24.0%, and then rebounded for 5 consecutive weeks. In the fourth week of June, it was 33.35 yuan/kg, rising for 5 consecutive weeks, with a cumulative increase of 4.86 yuan/kg, an increase of 17.1%. Pork prices in the national fairs fell from RMB 59.64/kg in the third week of February this year to RMB 45.98/kg in the fourth week of May for a continuous 14 weeks, a cumulative decrease of 23%, and then rebounded for 4 consecutive weeks. In the fourth week of June, it was 49.89 yuan/kg, and the cumulative increase in the four weeks was 3.91 yuan/kg, an increase of 8.5%.
"The price of live pigs in this round of rising production areas is higher, and the main sales area is relatively small. Hebei, Tianjin, Heilongjiang, Jilin, Liaoning, Jiangsu, Zhejiang, Shandong, Henan, Shaanxi and other production areas have accumulated more than 6 yuan/week. Kg, of which Shandong and Henan have increased by about 8 yuan/kg. The price of live pigs in Guangdong, the main selling area, has increased by about 3 yuan/kg." Zhu Zengyong said that this shows to a certain extent that the current tight supply of commodity pigs is still prominent. Although pork consumption has increased significantly, it is still in the process of recovery.
Zhu Zengyong believes that the reason for the recent rise in pig prices can be explored from both supply and demand. First, the fundamentals of tight supply of commodity pigs have not changed. In the first five months of this year, the slaughtering volume of hog slaughtering enterprises above the national level was 61.76 million heads, a year-on-year decrease of 33.9%. Since March, the slaughter volume has increased for three consecutive months, and the year-on-year decline narrowed from 36.9% in March to 27.7% in May, but it is still significantly lower than the same period last year. In the spring, the prevention and control of the new pneumonia pneumonia epidemic situation led to the formation of a large number of oversized pigs. The concentrated listing of oversized pigs caused the price of pigs to fall all the way. The pigs were gradually digested by the market until mid-May.
Secondly, pork demand is picking up. Statistics show that the national catering revenue in the first five months fell from January to March by 44.3% year-on-year, narrowing to 36.5%. Among them, the national catering revenue in March fell by 46.8% year-on-year, and the decline in May decreased to 18.9%. After the situation of domestic epidemic prevention and control has been fundamentally reversed, factories and enterprises in various places have resumed normal work and resumed classes, which has led to a significant increase in the collective consumption demand for pork. The rebound in population movement during the Dragon Boat Festival holiday also stimulated pork consumption.
The third is that frozen pork imports and frozen market consumption have been affected by the prevention and control of epidemic situations at home and abroad. Data show that in May 2020, my country's pork imports were 370,000 tons, a decrease of 5.13% from the previous month. At the same time, the detection of new crown virus nucleic acid in the frozen storage market in many places also led to the suppression of the export of frozen products.
The fourth is that the heavy rains in the south have affected the transportation of hog products. Under normal circumstances, as the temperature rises in the northeast region after May, the volume of transportation to the south will decrease gradually. Since entering the main flood season in June, the south has experienced five rounds of heavy rainfall. A total of 26 provinces across the country have been affected by floods and floods, affecting the speed and volume of inter-provincial pig and pork transportation.
"There is a certain room for seasonal rise in pig prices, and some of them may even rise faster, but overall, it is unlikely to surpass the previous historical highs." For the market outlook, Zhu Zengyong said that the pig cycle refers to the price of pigs The overall trend does not mean that the price of live pigs will continue to fall after reaching the peak. Under the general trend of declining volatility, there will also be second-highest prices and seasonal fluctuations. As of June 23, the government’s meat reserves have been released 22 times this year, totaling 410,000 tons. Later, the reserve meat will still be put on the market more frequently. In addition, the current frozen pork stocks are still relatively abundant, and August and September are the peaks of frozen product export, which will effectively suppress the rise in pig prices. Taken together, the high price of pigs may have passed, and there may be a faster rise in some time thereafter, but it is unlikely to exceed the previous high.