(Economic Watch) What is the later trend of China's pork price "seven consecutive rises"?

  China News Service, Beijing, June 8 (Reporter Chen Su) According to data recently released by the National Bureau of Statistics of China, the national live pig price reached 15.7 yuan (RMB, the same below) per kilogram in late May. The price of live pigs rose from 11.9 yuan per kilogram to 15.7 yuan, an increase of 32%, achieving a "seven consecutive increase".

Why do pork prices in China continue to pick up?

Is it entering a new round of pig cycle?

How will the price go later?

  Li Guoxiang, a researcher at the Institute of Rural Development of the Chinese Academy of Social Sciences, told a reporter from China News Agency that the price of live pigs in China fell sharply some time ago, and many pig producers fell into losses. Through China's adjustment to the structure of live pigs, pigs with backward production capacity were withdrawn, and the replenishment of live pigs increased from the peak. There has been a decline, and the situation of extreme overcapacity of live pigs has been improved.

The recent rational return of live pig prices is a positive response from the market after the adjustment of live pig production capacity.

  "The price recovery is a good thing for China's live pig industry. Six months later, it is the Spring Festival, New Year's Day and other peak consumption seasons. The current price increase will prompt farmers and breeding enterprises to replenish the stock, laying a good foundation for price stability in the later period. Good live pig production capacity is further adjusted and the golden period of live pig production operation."

  According to the Orient Securities Research Report, the sluggish pig price in the early stage combined with the rise in grain prices, and the industry has accumulated serious losses, which has dealt a great blow to farmers’ emotions. Since July last year, the total number of stocks has dropped by 9.8% month-on-month and 4% year-on-year. As the cycle progresses, the reduction in production capacity in the early stage is gradually reflected, and the price center of pigs is expected to continue to move upwards. In addition, the consumption expectations in the second half of the year are expected to improve, and the price of pigs will continue to rise. The strength of the reversal may exceed expectations.

  Recently, the sales data of many pig-raising companies and giants have also continued to improve, and pork prices have shown a trend of recovery to varying degrees.

  Muyuan Co., Ltd. announced on the 6th that the average sales price of commercial pigs in May was 14.87 yuan per kilogram, an increase of 18.39% from April.

Wen's Co., Ltd. announced that the company's revenue from sales of pork in May was 2.502 billion yuan, and the average sales price of wool pigs was 15.74 yuan per kilogram, an increase of 10.56% and 18.08% from the previous month.

  Kingkey Zhinong said that since late March this year, the market price of live pigs has continued to rise, and the company's live pig sales prices have recently risen significantly.

  As hog prices have recovered, so have pork prices.

According to the monitoring by the Ministry of Agriculture and Rural Affairs of China on bazaars and collection points in 500 counties across the country, the national average price of pork in the first week of June was 25.91 yuan per kilogram, compared with the fourth week of March (collection date was March 23) nationwide pork The average price was 22.38 yuan per kilogram, up nearly 16 percent.

  Many institutions believe that with the recent rebound in pig prices, China has started a new round of pig cycles.

  The Pacific Securities Research Report pointed out that with reference to history, on the basis of the reduction of breeding capacity, the upward trend of the future pig price cycle has been formed.

  Guoyuan Securities Research Report believes that from early October 2021 to late March 2022, the price of live pigs has deduced a "W"-shaped second dip.

According to the classification standard that the lowest point of the price of live pigs is the starting point of a new cycle, the starting point of the current cycle has been confirmed.

  Li Guoxiang believes that the cyclical fluctuation of live pig prices is an objective existence. Through the withdrawal of backward production capacity, the supply and demand relationship of the live pig market has been balanced, and there will be cyclical fluctuations rising.

  Looking forward to the price of pork in the later period, Li Guoxiang believes that the current recovery of pork prices is a good thing, which means that the business conditions of operators have improved, which will help the market return to normal. It is expected that the price of live pigs will gradually return to a reasonable range of 15 yuan to 25 yuan per kilogram.

  He pointed out that the current pork price is showing a trend of recovery. Due to the financialization of the pig industry, we should be alert to the adverse impact of speculation on the pig market.

"Currently, the mechanism of the live pig market has been maturing, and the entire market is seeking balance. It is observed that the recent replenishment of live pigs is mainly rational and timely adjustment. It is expected that the price of live pigs will not continue to rise in this round, and will not rise to the level of more than 30 yuan in the past. The price level. Pig farmers need to rationally view the price trend, put out the slaughter in a reasonable and orderly manner, and promote the stable and sustainable development of the market.” (End)