China’s most active live hog futures contract fell more than 3% on Wednesday, the biggest decline since July, as spot prices came under pressure from weak consumption and heavy slaughter volumes.
The January contract was down 3.05% at 20,315 yuan ($2,908.71) per tonne by 10:15 a.m. (0215 GMT).
Average national hog prices were 22.43 yuan per kilogram on Tuesday, according to Shanghai JC Intelligence (JCI) Co Ltd, and have declined 8% so far this month.
The market had expected a sharp drop in temperature this month to boost meat consumption, supporting pig prices, said Yuan Song, chief analyst at trading company Juxing Agriculture Group.
“But the current reality is that the consumption growth is not strong, and the supply is more abundant due to the increase in slaughter,” he added.
Beijing had urged major hog producers to step up slaughter volumes after prices rallied in the third quarter.
Top Chinese hog producer Muyuan Foods Co Ltd said on Monday it is expected to slaughter between 61 million and 62 million hogs this year, well above the 56 million it had earlier targeted.
“The market no longer has good expectations for a rise in pig prices before the Spring Festival,” said Yuan, referring to the Lunar New Year holiday next month that is normally the country’s peak pork consumption period.
($1 = 6.9842 Chinese yuan) (Reporting by Dominique Patton; Editing by Himani Sarkar and Uttaresh.V)
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