In late august, the domestic boar market emerged from a continuing downward trend, leading to a gradual general increase, but the upstream boar market was weaker and prices continued to explore the bottom, creating a pattern of “fat and fall”. According to ministry of agriculture and rural affairs monitoring data on the market in 500 counties throughout the country, the average national price of raw pigs in the third week of august was $11. 52/kg, an increase of 2. 6 per cent in the ring ratio, a decrease of 19. 4 per cent over the same period, and a total increase in prices in the country's 30 monitored provinces; the average national price of pigs was $21. 75/kg, a decrease of 1. 0 per cent in the ring comparison, a sharp decline of 34. 6 per cent over the same period, which is in sharp contrast to the situation in the pig industry。
The price of pigs rose by 7. 5%
As at 25 august, the average price of the three foreign pigs was $11. 13/kg, which was 7. 54 per cent higher than the cumulative increase at the beginning of the month, with a clear short-term rebound. According to the zhubong information and piggy market analyst, the core of the round's recovery was driven by seasonal warming from downstream demand. Compared to the high-temperature season in july, the country experienced a reduction in the high-temperature weather in august, with a marked recovery in the willingness of households to consume fresh meat and a marked acceleration in white-colour movement in agricultural markets. At the same time, there has been an increase in collective activities, such as promotions, openings and weddings, as well as a simultaneous increase in the demand for food from the group food channel, which has led directly to an increase in the slaughtering rate。
The recovery in demand was confirmed by the slaughter data, which rose from 16. 41 million on 3 august to 17. 32 million on a daily basis in august on behalf of the national slaughtering enterprise. As of 21 august, the daily average pig slaughtering capacity of the national sample slaughtering enterprise stood at 16. 9 million, an increase of 3. 33 per cent in the ring, or 1. 07 per cent in comparison with the same year, and marginal improvements in slaughtering demand, providing a phased support for the price of the pig。
It is clear that the movement from july to august confirmed that the price of pigs, while still convulsing, has largely developed upward trends. The future is expected to see a new year of highs as supply and demand tensions ease further。
The pig fell down
However, in contrast to the warmth in the raw pig market, the price of pigs has continued to go down since late july, when it opened down the downway and has now fallen to a low level during the year. Monitoring data show that on 24 july the price of 7 kg of weaning pigs rose to 258. 57 yuan/head, and then fell for three consecutive weeks, resulting in a cumulative decline of over 95 yuan/head and an overall decline of over 36 per cent. As of late august, the average market price for 7 kg of pigs and pigs was approximately $163. 3/first, with a downward adjustment of $10-20 this week, while the prevailing price price for some areas was only $140-160/first, with the actual transaction price falling even lower, with the largest decline of 57 per cent in some areas。
And while prices continue to decline, the trade dynamic in the pig market simultaneously cools. Multiple first-line pig-broker feedback shows that 7 kg of weasel-weasel-weasel pigs are currently sold cold and the market willingness to switch is extremely low, while the relative volume of 15 kg is still low, but prices are also continuing to decline。
The experience of a farmer in shandong was highly representative: 2,000 7 kgs of piglets were purchased around the 20th of last month at a cost of 270 yuan/head, raising a weight of 15 kg after a month, but the current market price for piglets is only 240 yuan/heads, after deduction of the costs of fodder, utilities, labour, etc., each pig is in a net loss, and the deficit situation in the supplementing column has left many farmers in a state of loss. Wri data indicate that the current sale of pigs and pigs is in the phase of full-scale loss, with the maximum loss of $130 per head。
Behind the split in prices between fats and pigs is the inherent division of markets between short-term repair and long-term expectations. The rise in the price of raw pigs was driven mainly by short-term seasonal demand, while the price of pigs corresponded to a four-to-five-month out-of-the-box situation, where the market remained concerned about the pattern of supply and demand in the long term and the persistence of a low level of catch-up, which directly led to weak demand and price pressures。
At the same time, the elimination of the price of pigs has declined by 23. 7 per cent over the same period, while the discount rate for pigs has continued to decline, and the acceleration of the de-development of production capacity in the industry has been documented. The national discount rate for pigs in the last three months dropped from 76 per cent in early june to 66 per cent in the second week of august, with a cumulative decline of 10 percentage points in three months, representing a marked increase in the number of such pigs phased out in the market. The continued loss of pigs accelerates the displacement of small and medium-sized farms, while the long-term loss of sow farms leads to the elimination of the landing of the abundant pigs, and the de-mining of industrial capacity is gradually becoming a reality from expectations。
In the medium-to-long term, the persistence of low prices for pigs will further stifle market impulses, speed up the evaporation of the production capacity of able-bodied pigs, and in the future, the supply of raw pigs will contract, providing basic support for long-term pig prices. It is important to note, however, that the low-cost, low-cost pigs who are now able to produce fat and can be out of the field for the first four months, from the fourth quarter to the beginning of next year, will also have an impact on subsequent market conditions, to some extent lowering the price center of the column phase。
Overall, the current price segmentation of raw pigs and pigs is a typical feature of the bottom phase of the cycle — short-term seasonal repair of demand leading to up-to-date reheating, but the industry remains cautious about the long-term situation and has insufficient power to make up. While the process of denuclearization is continuing, the substantial reversal of supply and demand patterns will take time to accumulate. In the case of farming subjects, it is possible to optimize the pace of a phase of behaviour in the short term, while the supplementing column needs to adequately assess the risks in the long term and avoid additional losses due to blind expansion。
