Pig price: a complete rebound or a flash in the pan?

This round of pig price decline began in early June. Neisansheng pig price fell from the highest point of 21 yuan / kg at the end of May to around 18 yuan / kg, falling for as long as 2 months, with a drop of 15%. Pig prices rebounded near the 18 yuan / kg mark after two months of continuous decline, and this rebound began in the north and gradually spread to the whole country. But is the rebound in pig prices a complete rebound or a flash in the pan?

I. supply market

1. Large cycle capacity recovery, continuous new construction and M & A production capacity of large groups in 2015-16. Although the production capacity of sows is still at a low level and the environmental protection policy has extended the cycle of capacity recovery, there are plenty of reserve sows as a whole. It is more common for farmers to use meat sows as backup in the market.

2. Import shock: in the current situation of huge internal and external price differences, large meat processing enterprises are facing greater cost pressure. Coupled with the fact that foreign countries are paying more and more attention to China's pork consumption market, imports reached a new high of 194000 tons in June, 762000 tons from January to June, and high pig prices in the second half of the year. Pork imports are expected to be high, and imports are expected to reach 1.2 million tons for the whole of 2016. The impact of imported meat on pig prices is increasing.

3. Pig prices have rebounded strongly, and the psychology of holding down the fence to cherish the sale has reappeared. In a survey, 60% of farmers thought that the rebound was relatively long, and blindly optimistic about the future, which would aggravate the situation of selling pigs and cause certain risks to the future supply market.

II. Consumer market

The main results are as follows: 1. The effect of autumn fat in the north is a short-term stimulus, and the stimulation time and amplitude are very limited.

2. in addition, the high level suppresses demand, and the substitution phenomenon is obvious. according to the data of the National Bureau of Statistics, "China's pig, beef, sheep and poultry meat output in the first half of 2016 was 38.53 million tons, down 1.3 percent from the same period last year, of which pork output was 24.73 million tons, down 3.9 percent." The output of beef, mutton and poultry was 13.8 million tons, an increase of nearly 500000 tons or 3.6 per cent over the same period last year. It can be seen that the overall high pig price in 2016 has affected pork consumption to a large extent, and the phenomenon of alternative consumption is more significant.

3. There is no obvious improvement in terminal consumer demand at present. On the one hand, it is the change of consumption habits, on the other hand, it is mainly the problem of food safety, and the market share of meat processing food has shrunk. At the beginning of the year, a well-known meat processing enterprise broke the news of default of 500 million short securities, which can also reflect the current situation of meat processing enterprises from the side.

The rapid rise in pig prices in Northeast China was stimulated by the consumption of the Beginning of Autumn's autumn darts in the north, and the influence of the supply fault in the stage (mainly due to the cold wave at the beginning of the year and the high mortality rate of piglets affected by the epidemic). In addition, pig prices continued to fall, and farmers came out more smoothly. The proportion of big pigs, cattle and pigs was relatively good, and the disaster in the south reduced the supply in the future to a certain extent, but it was more limited, and the risk of the epidemic surged more. Farmers have clear fence demand, overdraw future supply, the overall pig price has rebounded to a certain extent, pig price will be stronger throughout the first ten days of mid-August, the phased high is between 9.5 yuan / jin and 9.7 yuan / jin, but there is no basic change in terms of supply and demand. Affected by the recovery of large cycle production capacity, the impact of imported meat continues to increase. At present, pig prices in Northeast China have stabilized or even dropped slightly. We believe that there is a greater risk in pig prices in late August and September.