Live pig and pork prices continue to fall Have
pork prices bottomed out?
The price of pork, which was once “flying high”, continues to fall.
Data released by the National Bureau of Statistics on June 9 showed that in May 2021, the national CPI (Consumer Price Index) increased by 1.3% year-on-year.
Among them, the price of pork fell by 23.8%, affecting the CPI drop by about 0.50%.
Wen Bin, chief researcher of China Minsheng Bank, said that the CPI rose by 1.3% this month, an increase of 0.4 percentage points from the previous month, but it was still lower than expected.
He said that in the composition of my country's CPI, food prices account for a larger proportion, and food prices are more affected by pork.
As the price of pork increased rapidly last year, which drove the increase in food prices, while the price of pork fell this year, food prices were in a downward trend or a slight growth trend, which had an impact on the CPI.
Multi-party data shows that with the reversal of the supply-demand relationship under the pig cycle, the prices of live pigs and pork have continued to decline overall since the beginning of this year.
According to data from China Pig.com, on June 9th, the domestic ternary pigs were 15.56 yuan/kg, a sharp drop of 51.22% from the same period last year.
In this round of the pig cycle, the initial stage of the sharp increase in pork prices roughly coincides with the time point of the domestic African swine fever outbreak in 2018.
As the impact of the African swine fever epidemic gradually subsided, pig farmers increased their efforts in pig breeding, and the relationship between supply and demand improved or even reversed, and pork prices began to fall.
Has the current pork price bottomed out?
Previously, Muyuan shares, known as "Pig in Maotai", said it would be ready to welcome the winter of the industry.
The announcement issued by Muyuan shares shows that although African swine fever has had a greater impact on the industry's production capacity in recent years, the national pig production capacity has gradually recovered; according to the data of the Ministry of Agriculture and Rural Affairs, the national pig production capacity has returned to the normal level by the end of 2020. more than 90 percent.
The recovery of live pig production capacity will bring down the price of live pigs. Although the price may rebound seasonally in the future, the price of live pigs generally shows a downward trend. "It is expected that the live pig industry will reach the bottom in 2022 or 2023."
Centaline Securities believes that under the trend of declining pig prices, pig farmers have increased their slaughter volume, the supply side has increased, and slaughter companies have a strong willingness to keep prices down, which has led to an accelerated decline in pig prices.
However, affected by the increase in feed costs, pig prices in some areas have fallen to the cost line of self-breeding and self-raising households, and households purchasing piglet fattening have also entered a state of loss.
Pork is the most important source of meat and animal protein intake for Chinese residents, and ensuring the supply of pork on the market and the stability of its price are closely related to the vital interests of the people.
At present, in some areas where the price of live pigs has fallen sharply, government departments have begun to reverse operations, reserve pork, and smooth the cycle.
Recently, the National Development and Reform Commission and other departments jointly issued the "Plan for Improving the Government's Pork Reserve Regulation Mechanism and Doing a Good Job in Maintaining Supply and Stabilizing Prices in the Pork Market" (hereinafter referred to as the "Plan").
Based on the original "Pig and Grain Price Comparison" indicator, the "Preplan" added early warning indicators of "Change rate of breeding sow stocks" and "Average retail price of lean meat in 36 large and medium-sized cities".
Among the newly added indicators, the former can significantly improve the forward-looking of risk warning and reserve adjustment, and the latter is closer to consumers' feelings, and can provide timely warning and response when pork prices rise excessively.
At the same time, the "Preplan" distinguishes two situations of excessive fall and excessive rise in live pig prices, sets up a three-level early warning interval, and sets up regular reserves and temporary reserves according to the different functional positioning of the government's pork reserves.
The relevant person in charge of the National Development and Reform Commission stated that the "Preplan" will give full play to the important role of the government's pork reserve adjustment as a key starting point. Stable prices promote stable supply.
This means that when the price of pork is too high, the government will put in reserves to protect the consumption needs of residents, push the price to fall to a reasonable range, and avoid excessive expansion of live pig production; when the price is too low, the government will start purchasing and storage to support the market for breeding Farmers take the "reassurance pill" to avoid over-elimination of live pig production capacity.
What the two points to is the government's determination to guard against the ups and downs of pork prices and to protect people's livelihood.
Our newspaper, Beijing, June 9th
China Youth Daily · China Youth Daily reporter Zhang Junbin Source: China Youth Daily