Tranalysis: Guangzhou: In the past 20 months, the pig price in China fluctuated greatly. In March 2015-May 2016, the average sales price of live pig increased to RMB21/kg in May 2016 from less than RMB12/kg in March 2015. However, in June – Oct. 2016, the price dropped back to the level in Dec. 2015, hitting a historical low in the past ten months.
The reasons behind the huge decline of pig price from June in 2016 were quite obvious. The supply and demand decided the price. This round of pig price decline was mainly caused by the weak demand of pig and the increase on pig supply.
After the Dragon-boat festival in China, with the higher temperature, the pig industry entered its slack season, which caused the weak demand of pig. On the contrary, the seasonal survival rate of pig after March and April helped improve the supply of pig.
In addition, with the pigs ready to sell after raising them for half a year in H1 2016, the supply of pigs increased rapidly. And the live-pig slaughtering enterprises took the chance to cut the pig price.
In addition, the changes of cost also affected on the falling pig price, especially the depressing corn market, which could further lower the pig price.
Moreover, the import volume of pork increased greatly after June 2016, which had further impacted on the China pig market.
Besides all the said reasons, the import pork was the major reason to cause the low price of pig. In Jan. – August 2016, the import volume of pork reached to 113.78 million tonnes, up 7.78 million tonnes than that in last year. Calculated based on that ever live pig weighs 110kg, China imported 16 million live pigs, accounting for 15% of the total number of pigs in China.
Currently, China has opened 50 ports for pig import to increase the import volume. It is predicted that China would import over 2 million tonnes of pork in 2016 and most of the imported pork comes from the US.
The average cost for the US pork is only one third of that of China pork. Even if with taxes and transportation expense, the pork in the USA is still cheaper than that in China.
Thus, it is predicted that the pig price would keep fluctuating and falling.
Tranalysis is an intelligence and analysis provider on import/export data covering agriculture, chemicals and life science industries in China. Tranalysis, founded in 2001, provides users not only large amount of import/export data in China, but also analysis to help monitor the market trends. Our clients include Monsanto, BASF, Syngenta, SinoChem and etc.
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