According to the Commodity Market Analysis System of SunSirs, as of May, domestic pig prices have continued to rise slightly. Starting from late May, pig prices have risen significantly. As of May 28th, the average price of foreign Sanyuan pigs was 16.90 RMB/kg, a significant increase of 13.80% compared to the beginning of the month's price of 14.85 RMB/kg, and an increase of 18.02% compared to the same period in 2023.
At the beginning of May, the domestic pig price once again fell to the 15 RMB/kg mark, and the pig price continued to decline. The loss making situation in the breeding industry led to a stronger mentality of reluctant sales and price support among breeding entities. The supply-demand game in the domestic pig market continued to intensify, and the pig market price continued to consolidate and operate near the profit and loss point. The sustained low operation of pig prices has triggered some breeding entities to engage in secondary fattening, leading to a decrease in domestic pig market supply. Slaughtering enterprises have raised prices slightly to ensure production and replenish inventory. In addition, domestic corn and soybean meal prices have slightly rebounded, supported by costs and demand, resulting in a slight rebound in domestic pig market prices in mid May.
Last week, the Ministry of Agriculture and Rural Affairs released data on the stock of sows capable of breeding in April 2024. As of the end of April, the national stock of sows capable of breeding was 39.86 million, a month on month decrease of -0.1%, and a year-on-year decrease of -6.9%. The production capacity of pigs continued to decline, and it has dropped to below the normal stock of 39 million. The inventory of sows that can be bred continues to decline, and domestic breeding entities are bullish, leading to a surge in market sentiment. In addition, some pigs are being intercepted by secondary fattening, resulting in a significant decrease in pig output. The domestic pig market has entered a situation of supply shortage, and the transformation of the supply and demand relationship of pigs has helped push up the domestic pig market prices rapidly and significantly in late May.
Entering June, domestic temperatures will continue to rise, and demand in the terminal meat market will fall to a certain extent. At the same time, the overall acceptance of the terminal market is relatively low after a significant surge in pig prices. The demand in the terminal meat market will continue the previous sluggish trend, which will form a certain suppression on the continued rise of pig prices in the future.
In April 2024, China imported 86,900 tons of pork, a month on month increase of -6.2% and a year-on-year decrease of -35.7%; In April 2024, China imported 108,500 tons of pig offal, a month on month increase of -1.9% and a year-on-year increase of 13.5%. In April 2024, China exported 2300 tons of pork, a month on month increase of -2.5% and a year-on-year increase of 16.2%; In April 2024, 5,200 tons of pig offal were exported, a month on month increase of 6.4% and a year-on-year decrease of 12.7%. Affected by the sustained low prices in the domestic pig market, China imported a total of 343,300 tons of pork from January to April 2024, a year-on-year increase of -48.4%. The overall import volume of pork is at a relatively low level, and the impact of a small amount of imported pork arriving at the port on the overall domestic pig prices is limited.
In May, domestic corn and soybean meal prices both rebounded to varying degrees. As of May 28th, domestic corn prices increased by 1.49% and soybean meal prices increased by 4.79%. The cost of breeding and feeding has slightly increased. In addition, the comprehensive cost of breeding has increased after the weather turns hot, and the continuous rise in breeding costs will further support the price of live pigs in June.
SunSirs pig product analyst believes that the recent surge in secondary fattening coupled with the comprehensive reluctance of breeding entities to sell and raise prices, has led to a phase of tight supply in the domestic pig market. In the short term, it is difficult to quickly improve the supply-demand relationship. In addition, the slight rebound in corn and soybean meal prices has driven up feeding costs, and there is still some room for price recovery in the domestic pig market in June.
Since June, domestic temperatures will continue to rise, coupled with the upcoming holiday of high schools, downstream overall procurement will be more cautious, and the demand for terminal meat market will be even lower, which will to some extent suppress the potential for further increase in domestic pig prices in the future.
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