The pig market has been full of twists and turns this year. Will pig prices rise again later?

Summary: The pig market has been full of twists and turns, with limited further gains

This year's pig prices have indeed been full of twists and turns, falling all the way since after the Spring Festival. By mid-May, pig prices had dropped to a low of four and a half yuan per jin. After the twists and turns of late May and June, pig prices finally managed to climb out of the trough. And if we look at the price trend from May to now, pig prices are indeed in an upward channel, and this trend will continue in the future, though price gains will be limited in the short term.

Short-term price rise demand

Recent media reports say that pig prices in a certain place in Zhejiang, China, soared to 18 yuan per kg. Such a price can be said to rank among the highest in China, and Jiangsu, Shanghai and other places have also seen price increases to varying degrees. The price fluctuations in certain local areas are, judging from the current situation, to a large extent affected by African swine fever in China, making the movement of pigs quite difficult and causing tight supply in local areas.

In addition, affected by the arrival of the Mid-Autumn Festival and the National Day holiday, the demand for pigs is much greater than usual, increasing the supply pressure on the pig market. Moreover, because of the earlier impact of African swine fever, farmers chose to send pigs to market early one after another in order to reduce risks. This has created the current situation of a supply vacuum. All of the above factors have played a strong supporting role in the current rise in pig prices.

Long-term momentum for pig price rises

Judging from the current pig prices, although they have improved considerably compared with May, the price is still very low. In many areas of Northeast China, pig prices are still stable at 5.5 yuan per jin, which can be said to still be fluctuating around the breeding cost line. We know from the law of market value that the current market is in a stage of price rebound, not in a downward price channel. Therefore, although the current market supply of pigs still appears excessive, the long-term general trend of rebound will not change. After eliminating excess production capacity, it will continue on the path of price increases.

Limited short-term rise

One major reason for this year's sharp drop in pig prices is severe oversupply in the market, and the current supply side can only be said to have eased slightly, not to have fundamentally changed. Pig breeding has a long cycle, and production capacity cannot be completely changed in just a few months. Affected by the sluggish pig prices in the first half of the year, many farmers chose to exit the breeding market. However, judging from the current situation, the supply situation still has not been fundamentally reversed, and the Agriculture and Rural Affairs Report has repeatedly issued reminders. Therefore, future pig prices, at least this year, are likely not to see major improvement.

In summary, future pig prices will still rise somewhat, but it is still the same saying: when the market fundamentals cannot be fundamentally changed, future market price gains will be limited. Here I also suggest to all farming friends, sell at the right time and avoid losses.

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