SunSirs: Agriculture: The Price of Pig Fall For The First Time and Eggs Follows

1. Price Trend

On November 18, the live pig index is 248.25, a decrease by 5.11 points from yesterday. It is 9.74% lower than the highest point at 275.03 on November 4, 2019 in the cycle, and it is 254.64% higher than the lowest point at 70.00 on May 13, 2018 in the cycle (Note: The cycle refers to November 1, 2012 to date).

On November 18, the egg index is 124.12, a decrease by 6.81 points from yesterday. It is 17.29% lower than the highest point at 150.07 on October 31, 2019 in the cycle, and it is 131.57% higher than the lowest point at 53.60 on May 18, 2017 in the cycle (Note: The cycle refers to December 1, 2013 to date).

According to data from SunSirs, the prices of live pigs and eggs have jumped in November. In the first 10 months of 2019, the price of live pigs broke the 20-yuan mark, continuously rose by 244.71%. In November, the pig price ushers in the first drop, and the price begins to dive in a few days. Up to November 18, the price falls by 7.88%. At the beginning of the year, the pig price still rose by more than 200%, remaining at high level. Compared with the crazy rise of pig prices, eggs perform relatively calmly, with an overall increase of 39.8% in the first 10 months in 2019. The price in November falls with the price of pigs. Up to November 18, the price falls by 12.06%.

2. Market Analysis

The increase of pig supply makes first continuous decline.  

Since November, the price of pigs that have continued to rise has ushered in the first decline. Even after falling for many days, the price of pigs falls below the 20-yuan mark. This reason is that pig farming industry has gradually entered the recovery period. The monitoring of the Ministry of Agriculture and Rural Affairs shows that the decline in the number of live pigs in the country is significantly narrowed, and the number of sows that could produce begins to increase. In October, the live pig stocks falls by 0.6% from last month, and the growth of the sows increases by 0.6%. In the early period, the price of live pigs has skyrocketed and farmers keep pigs on hand to wait for a higher price until they have to sell pigs. Once it happens, there is a high density of selling in the market, associated with extremely high price, ending up in sluggish terminal demand. Meanwhile, with competing with frozen meat and imported meat, the price of domestic pigs continues to fall after the overall high.

Affected by pig price, egg price continue to decline simultaneously.  

The crazy rise in egg prices in October is mainly stimulated by the crazy pig price. The rising pork price promotes the consumption of substitutes such as eggs. Therefore, the price of eggs follows the price of pigs. In November, the price of pigs continues to fall, causing the space for supporting egg prices to be limited. At the same time, the consumption of eggs goes into off-season. And winter is easier to store eggs. Terminal procurement become cautious, Egg price have fallen, And the price falls lower than 5 yuan mark, a decrease by above 5%.  

3. Market Forecasting

Li Bing, an agricultural product analyst at SunSirs believes that the rigid demand for pork and eggs is still strong near the New Year's Day and approach of Spring Festival. Although the current pig price has dropped to 18 RMB/kg, it is still high compared with the same period of last year. The production capacity of pigs is still at a low level. Meanwhile, the pig price is running high supporting eggs price at high level as well. It is predicate that price of eggs will stop falling.

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