Original title Reserve meat is put into preparation for a rainy season, and the price of pigs in peak season is difficult to “fly”
Securities Times reporter Zhao Liyun
The expectation of the peak season of live pig demand has not really come to fruition, and the news of the policy end to ensure supply and stabilize prices has appeared in advance, which can be said to be prepared for a rainy day. The National Development and Reform Commission announced on August 29 that it will work with relevant departments to release government pork reserves in batches from September, and guide local governments to jointly release the reserves.
Although the National Development and Reform Commission in early July this year announced that it will study the release of pork reserves, it is the first time this year that it has been decided to implement batches of pork reserves.
At present, the average price of lean-meat pigs in the country is around 22 yuan/kg. Under the condition of self-propagation and self-support, the profit of each fat pig is about 300-500 yuan, which is in the normal profit range. According to data from the Ministry of Agriculture and Rural Affairs, in July 2022, there will be 42.981 million breeding sows in the country, an increase of 0.5% month-on-month, equivalent to 104.8% of the normal population, which is also within the normal range.
Why did the National Development and Reform Commission carry out stockpiling at this point?
From April to early July this year, the domestic live pig price rebounded significantly from the bottom, and there was an abnormal phenomenon that the increase exceeded 30% in just two weeks. Among them, in addition to the influence of the pig cycle recovery, there are also irrational slaughter reluctance and secondary fattening in the market, which has intensified market tension in the short term.
Although a series of measures to maintain supply and stabilize prices in the live pig market continued to advance after the beginning of July, the soaring pig prices were temporarily suspended. However, as September is approaching, with the recent drop in the high temperature in many parts of the country, students have returned to schools and resumed classes after the end of the summer vacation. National Day, New Year’s Day, Spring Festival and other important festivals are approaching, and the pig market has also ushered in a traditional peak demand season, and the bullish sentiment on the breeding side has spread again.
In the futures market, the price of 2301, the main contract of hog futures, had the largest increase of more than 11% from August 12 to 29. In the spot market, the national average price of lean-meat live pigs has also risen slightly recently, rebounding from 21.5 yuan/kg to around 22.3 yuan/kg in a week.
It should be said that although a certain amount of purchasing and releasing reserves will not shake the overall market supply and demand pattern, it has played a significant role in ensuring pork market supply and stabilizing live pig prices over the years. In the middle and late June of this year, the 12th and 13th batches of national storage frozen meat were purchased and stored successively. After the price of the domestic live pig market rebounded rapidly, the policy side frequently made efforts to change from the early purchase and storage to the release and storage, which is effective. Curb the soaring momentum of pig prices. After the National Development and Reform Commission released the news on the morning of the 29th, it caused a shock to the live pig period and the spot market. The price of 2301, the main contract of live pig futures, opened up to 23,970 yuan / ton in the morning, refreshing the high point of the year, but then there was a phenomenon of substantial lightening and diving, and spot pig prices in various places also appeared again.
Expensive meat hurts people, cheap pigs hurt farmers. Excessive cyclical fluctuations are not conducive to the long-term healthy development of the industry, which is also the main reason why my country is currently vigorously maintaining the normal market order.
Although it has undergone a long period of grinding, the current production capacity of live pigs in my country is still at a normal level, and the price does not have the basis for a sharp increase. With the continuous strengthening of market regulation by relevant departments, the price of live pigs in my country is expected to maintain a stable operation, and it is difficult to “fly” again.
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Responsible editor: Jiang Xiaotong