Price Weekly Report | Pork Prices Continue Approaching 10 Yuan/Kilogram Mark, Slow Capacity Digestion May Prolong Bottom-Building Period

According to the Ministry of Agriculture and Rural Affairs’ monitoring, on March 20th, the average wholesale price of pork at national agricultural product markets was 15.98 yuan/kg, a 1.2% decrease from last Friday (March 13th), when it was 16.17 yuan/kg. The average price this week was 16.13 yuan/kg, down 3.4% from last week’s average of 16.7 yuan/kg.

This week, domestic live pig prices generally showed a trend of rising first and then falling, with weekly average prices decreasing week-on-week. According to data from China Swine Industry Network, on March 20th, the price of external three-breed pigs was 10.24 yuan/kg, down 0.5% from last Friday (March 13th), when it was 10.29 yuan/kg. Looking at the weekly average, the price of live pigs was 10.28 yuan/kg, a 0.4% decrease from last week’s average of 10.32 yuan/kg.

Recent pork and live pig prices. Chart by The Paper News

This week, the average weight of traded live pigs nationwide has stopped rising and started to decline. According to monitoring by Zhuochuang Information, the average transaction weight of live pigs nationwide was 125.55 kg, down 0.04% week-on-week. In different provinces, the average transaction weight has both increased and decreased. Some regions’ breeders lack confidence in the market outlook and are actively selling pigs, often reducing weight to minimize losses, which causes weights to drop. In other areas, weak demand has limited slaughtering, leading breeders to hold onto pigs and increase weights, which raises the average weight. Overall, most regions saw a decline in weight, causing the national average to stop rising and decrease this week. The operating rate of major domestic slaughter enterprises increased week-on-week, with an average operating rate of 34.32% during the week, up 2.34 percentage points from last week. Currently, slaughter enterprises are still gradually recovering slaughter volumes, with both slaughter volume and operating rates continuing to increase slightly. Additionally, due to lower pig prices, slaughterhouses’ pig procurement costs have decreased, encouraging some regions to stockpile pigs, which ultimately contributed to a slight increase in operating rates this week.

Recently, the National Development and Reform Commission and the Ministry of Agriculture and Rural Affairs organized a meeting with pig breeding companies to analyze and assess the market situation and plan market regulation measures. The meeting pointed out that, influenced by factors such as post-holiday declining consumption demand, pig prices have fallen into an early warning zone of excessive decline. The central government has begun stockpiling frozen pork reserves and is guiding local authorities to increase their stockpiling efforts to form a coordinated regulatory force. The meeting required pig breeding enterprises to strictly implement capacity regulation measures, plan production and operations scientifically, orderly reduce the breeding sow herd, and reasonably control pig slaughter volumes to better align supply and demand. Moving forward, the National Development and Reform Commission and the Ministry of Agriculture and Rural Affairs will closely monitor the supply, demand, and price trends of the pig market, timely adjust reserves, and continue to strengthen comprehensive capacity regulation to promote stable market operation.

Guoxin Futures believes that recent slaughter volumes have increased rapidly, but sales of fresh products have seen limited improvement, while frozen inventory continues to rise, reflecting some stockpiling behavior at slaughterhouses. Meanwhile, sporadic restocking of second-generation pigs has occurred, with increased utilization of pens, but average slaughter weights remain high, indicating slow liquidation of live inventory. Given the currently low absolute prices and the lack of economic justification for holding pigs, industry-driven stockpiling is unsustainable. In the future, there is a risk of industry-wide sell-offs under financial pressure. In the long term, piglet prices during peak seasons remain weak, fattening profits continue to be losses, further discouraging restocking, and profit margins for piglets are expected to fall back into losses, possibly accelerating capacity reduction.

Dadi Futures believes that slow digestion of near-term capacity may prolong the bottoming process of pig prices. During this period, there may be some seasonal rebounds, but a cyclical reversal will likely require patience as the breeding sector gradually reduces profits and drives capacity reduction.

Zhuochuang Information forecasts that the national market may experience slight fluctuations or a mild decline in the coming week. Regarding supply, pig sources from breeding units remain ample and are likely to continue entering the market, exerting downward pressure on prices. However, after prices fall to low levels, breeders may resist further declines during midweek, which could limit the extent of price drops. On the demand side, slaughter volume growth from downstream slaughterhouses may be limited, and cautious restocking of second-generation pigs may also weigh on market sentiment.