Do You Eat Pork in These Days

Pork is the main meat eaten in China because it is both traditional and relatively cheap. The price of Pork is the main meat in China, which surpassed its previous record in June, even as the fight against inflation is a priority for the government.

Last week pork cost 27.67 Yuan (US$4.30) a kilo, surpassing the previous peak of 26 Yuan set in 2008, the China Daily reported, citing Feng Yonghui, an analyst with Soozhu.com, an online pig market monitoring service.

In our slaughtering and meat processing industry report published in Sep, we mentioned that "the wholesale pork price could reach the peak level ofRMB19/kg this year (2010), a level reported in early 2009. The Agriculture Ministry’s most recent statistics show the price of live pigs soared by 71.3 percent from March to April, while pork prices increased 29.3 percent. Prices also rose significantly in May.

The price (pork) will continue to rise until the end of the year," warned Zhu Baoliang, an economist at the Information Center of the State. Why is happen to this question?

Many researches think that the price of corn, which accounts for around 60 per cent of pig feed, hit a record high in March, sending pig and pork prices skyrocketing in the following months, according to people said.

Despite a higher incentive in restocking recently, we believe such incentive will start to eliminate when pork market enters into a low season due to high feed costs and higher risks in hog raising. Since the re-stocked swine are likely to be sold in Jul, which is a low time in summer, pork price in Jul is difficult to exceed current price.

Now, China produces an unbelievable number of pigs every year – nearly 450 million in 2008, according to the United Nations, while the U.S. produced just 65 million. That makes keeping track of all the pork flooding the market extremely difficult.

Also, a rise in feed costs will affect hog raisers’ profit. Therefore, we estimate that pork price will hit its lowest level this year in Jul-Aug as hog raisers will sell their hogs together to ensure their profit.


Nevertheless, the fall in pork price will be limited at around 5-7% due to reduction in hog stock and high feed costs. Pork price is likely to rise further when the market enters into another peak season. We expect the average wholesale pork price to jump around 20% Yoyo to RMB20/kg in 2011. Pork price may reach the highest level of RMB22/kg in 4Q11.


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