Prices: Pig market in free fall
Prices

Pig market in free fall

Imago / VCG
Prices on the Chinese pig market have been under heavy pressure for months due to increasing supply.
Prices on the Chinese pig market have been under heavy pressure for months due to increasing supply.

CHINA, Beijing. Increasing supply is causing prices for slaughter cattle and meat to fall in the People's Republic. Fatteners are also burdened by high feed costs.

Prices on the Chinese pig market have been under heavy pressure for months due to increasing supply. Trading on the live hog futures market at the Dalian Commodity Exchange (DCE) yesterday saw the settlement price for September futures fall to its lowest level since the exchange opened in early 2021. At CNY 19,815/t (€ 2,546), it fell below the CNY 20,000/t (€ 2,568) mark for the first time; the price level was 30% below the level of the very first settlement price on January 8. The November contract was last quoted at CNY 18,950/t (€ 2,435). Since hog futures are to be physically delivered on the Chinese DCE, they are approaching spot market prices with maturity dates, but these are currently still lower.

According to surveys in 27 provinces nationwide, the average slaughter pig price yesterday was only CNY 15.53 (€ 2.00) per kilogram of live weight, down 57.6% since the beginning of the year. In view of high feed prices, the production of slaughter pigs is thus only possible at a loss, according to analysts. This is particularly true of producers, who in March had to pay a price per kilogram of around CNY 86/kg (€ 11.05) for piglets purchased; that was around € 220 for a 20-kg animal. In the meantime, the piglet price has also crashed to CNY 43.50/kg (€ 5.59), which is only half as high as in March.

What worries pig farmers, on the other hand, delights Chinese consumers. According to the National Bureau of Statistics, they had to spend about 21% less money on their pork purchases in April than in the same month last year. The data for May, which is expected shortly, is likely to be in the same direction. The stock prices of Chinese pork producers are also on the decline. The summary index at the end of May was down about a third from its high for the year. Although analysts believe that the price decline could bottom out in the next few weeks, a massive increase in prices is not expected in the second half of 2021. Thus, the "golden days" for EU pork exports to China with very high margins are also likely to be over.

Source: fleischwirtschaft.de; AgE
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