Our reporter Du Yumeng, trainee reporter Yang Jie

　　As a sub-indicator that has attracted much attention in CPI data, since October, the rebound of pork prices has aroused the attention of all parties in the market.

According to data from the Ministry of Agriculture and Rural Affairs, as of 14:00 on October 29, the average price of pork in the national agricultural product wholesale market was 22.53 yuan/kg, an increase of 1.1% from the previous day, continuing the upward trend for nearly half a month.

　　So, will the increase in pork prices continue?

Has the pig price turning point reached?

A number of industry insiders interviewed by a reporter from the Securities Daily said that it is expected that the oversupply of pork is uncomfortable with seasonal improvement in demand, and the rebound in this round of live pig prices may be unsustainable.

　　Pork prices rebound

　　The industry says it's hard to say that the trend reverses

　　Pork reserves are an important policy tool for ensuring supply and price stability in the live pig and pork markets.

Since July this year, in order to cope with the rapid decline in the prices of live pigs and pork, the National Development and Reform Commission and relevant departments have carried out the central frozen pork reserve procurement and storage work, and instructed all localities to proceed simultaneously to stabilize market expectations.

　　On October 10, the Ministry of Commerce, in conjunction with the National Development and Reform Commission, the Ministry of Finance and other departments, purchased and stored 30,000 tons of central reserve pork, and arranged for storage in 12 provinces.

On October 28, the relevant person in charge of the Beijing Municipal Development and Reform Commission revealed that it plans to launch the second round of temporary reserve purchasing and storage in the near future.

　　Chen Mengjie, chief strategy analyst of the Yuekai Securities Research Institute, told the "Securities Daily" reporter that the short-term purchasing and storage may be conducive to the stabilization and recovery of pig prices, but it is difficult to bring the inflection point of the pig cycle. The change in the supply and demand structure is the decisive factor for pork prices.

　　Judging from the current situation, the effect of purchasing and storage has appeared.

According to data from the Ministry of Agriculture and Rural Affairs, since mid-October, the average pork price in the national agricultural product wholesale market has rebounded periodically, from 17.53 yuan/kg on October 12 to 22.53 yuan/kg on October 29, an increase of 28.52% .

　　Ms. Li, who lives in Harbin, told reporters, “Previously, the special price of pork in supermarkets was about 5 to 7 yuan per catty, but the current price has risen to 13 yuan per catty. Overall, the price is still not high.”

　　Hualian Futures researcher Jiang Qin told a reporter from the Securities Daily that in recent days, many places have started the winter reserve work such as cured bacon and enema, and slaughter companies have started a small increase, and market demand has increased significantly.

Although there is a seasonal trend in consumption, the fourth quarter still shows a situation where supply exceeds demand. It is expected that there will be a high probability of maintaining an oversupply pattern in the first half of next year, and pork prices may have a second bottoming after 2022.

　　Shen Xinfeng, assistant general manager of the Northeast Securities Research Institute, said in an interview with a reporter from the Securities Daily that, combined with the clearing laws of past pig cycles, it is expected that the downward phase of this round of super pig cycle may continue for more than half a year.

From the perspective of supply and demand, because pig companies have been profitable during the upward phase of the pig cycle, the capital safety pad is thick, and the ability to resist falls is relatively strong. The cost pressure is not smoothly transmitted to the reproductive sows, and the current reproductive sows are eliminated. Most of them are low-efficiency three-way multiplication, which in turn leads to passivation of the transmission of pig prices. Therefore, although the number of reproductive sows has turned negative from July, it is still too early to say that the trend of pig prices is reversed. .

　　Investors pay attention to pig business operations

　　Listed company said it will improve production efficiency

　　With the continuous decline in pork prices since this year, consumers have undoubtedly achieved "pork freedom", but for related companies such as pig breeding, there is considerable pressure.

　　According to statistics from the three quarterly reports of a number of listed companies in the pig breeding industry, the drop in pig prices is one of the main factors affecting their operating profits.

　　A staff member of a breeding company told the "Securities Daily" reporter that the drop in pig prices has greatly squeezed the profit margins of farmers and has had a significant impact on the entire industry. "As a breeding company, what we can do at present is to increase production. Efficiency, reduce breeding costs, in order to withstand the risk of pork price fluctuations."

　　In fact, the drop in pork prices has caused many investors to ask listed companies about their business conditions and countermeasures on the interactive platform of the Shanghai and Shenzhen Stock Exchanges, and some listed companies have responded positively.

　　For example, a breeding company in Henan Province replied, “China’s pig breeding industry has long been dominated by free-range breeding, with low industry concentration and a large number of free-range households and small and medium-sized farms. The company will continue to improve the level of intelligence and operation. , To further improve production efficiency and enhance company value."

　　An animal husbandry company in Hunan Province said that the company’s live pigs are still in the breeding stage. The low price of pigs will help the company reduce the cost of local black pig breeding. It will take time for the black pigs to be listed in batches. The performance impact is small.

　　"In the downward phase of the pig cycle, companies with cost advantages can better withstand cyclical fluctuations, focusing on optimizing efficiency and reducing production costs will help the company buck the trend and increase market share." Chen Mengjie believes.

　　Taking the new hope of one of the “star” pig breeding companies as an example, the company’s staff told the Securities Daily reporter that the current logic of pig companies to achieve cross-cycle growth through cost advantages still exists when the pig price is down cycle.

For leading companies, the real advantage does not lie in following cyclical fluctuations, but in relying on advanced production and business models to achieve higher efficiency and lower costs.

In the future, the company will increase the proportion of self-breeding and self-breeding, and strive to achieve replacement of self-produced sows in the future.

　　IPG chief economist Bo Wenxi said that as a strong cycle of China’s pig breeding industry, in addition to reducing costs with large-scale breeding and gaining scale effects to improve anti-cycle capabilities, it also requires technological progress and continuous innovation in business models to adapt to it. Challenges of industry development and changes.

(Securities Daily)