BOABC Viewpoint

In August 2020，average hog price is 37.42 yuan/kg nationwide, increasing by 0.03% month on month; piglet price is 104.75 yuan/kg, increasing by 2.32% month on month. In this month, the profit of feeding self-produced pigs and outsourcing pigs respectively is 2649.29 yuan/head and 1368.87 yuan/head.
Affected by rainfall and rainstorms in south China in June and July, a large quantity of pigs were sold ahead of schedule, leading to a reduction of hogs available for sale and a rise in pig prices in the South in August. In the North, pig prices declined mainly because hogs purchased by farmers in May and June for further fattening intensively appeared on the market in August, so supply was relatively sufficient. With the rising of pig prices in south China, more pigs were transported from the North to the South, bringing about a slight growth in pig prices in the North in late August. As a whole, pig prices in China saw a growth from the previous month in August. 
As schools open successively in the country in September, pork consumption will increase, a driving force for the rise of pig prices. Group pig farms generally raise their sales targets in September by 10-15% compared with that in August. To finish sales targets, group farms may lower the selling price as their feeding cost is relatively low, which may drive down the average price of this industry. In addition, if pig prices are too high in early September, the central authorities will release more frozen pork from state reserves into the market, which will bring about a price decline in late September.  
Therefore, we predict that pig prices in September will rise first and then decline in China, and the monthly average will present a downward trend. It’s estimated that pig prices will be around 35-37yuan/kg.