BOABC Viewpoint

In September 2019，average hog price is 27.72 yuan/kg nationwide, increasing by 22.19% month on month; piglet price is 53.32 yuan/kg, increasing by 17.43% month on month. In this month, domestic feeding profit of hogs slides down rapidly, of which, the profit of feeding self-produced pigs and outsourcing pigs respectively is 1697.42 yuan/head and 1183.46 yuan/head.
Due to tighter supply of pigs in China in September, the price of pigs continued to rise, resulting in a sharp increase in the terminal retail price of pork. At the end of September, the retail price of pork rose up to 40.54yuan/kg, a record high, which seriously impacts the livelihood of Chinese people. In order to stabilize pork prices, the state put reserved pork on the market more than once, and local governments such as Guangdong, Guangxi, Fujian, Zhejiang, etc. successively introduced pork subsidy policies. But under the background that pig supply can’t be recovered, pork supply was still insufficient, the actual effects of price-control policies were not obvious, and pig prices continued to rise in September.
The terminal price of pork has increased to the peak, and most residents said that it’s hard for them to accept the price and will reduce pork consumption. It’s expected that pork consumption will drop to the bottom in October and November. As the beginning of winter after November, the demand of pork will rise, Chinese residents or will accept high-price pork for the long-term existence of high pork prices to some extent, and the consumption demand is expected to recover. It’s predicted that pig prices will continue to rise in October, and the average price may exceed 30yuan/kg.
BOABC estimates that China’s slaughter of hog was about 500 million heads in 2019, decreasing by 30% year on year, pork output was 37 million tons, decreasing by 32% year on year and the average price of hog will be 16-20yuan/kg. The detail data are as follow: