The reform of pork storage and collection will be launched immediately in conjunction with the central government and relevant departments. According to preliminary statistics, at present, Beijing, Jiangxi, Hubei, Chongqing, Yunnan, Shaanxi, Ningxia and other places have started collection and storage, and other places will also start in the near future.
According to huachu.com, the first batch of bidding transactions for the purchase and storage of frozen pork in the central reserve in 2022 totaled 40000 tons, which were carried out on March 3 and March 4, 2022 respectively.
Earlier, the national development and Reform Commission monitored that the national average pig grain price ratio was 4.98:1 in the week from February 21 to 25, entering the level-1 early warning range of excessive decline determined in the working plan for improving the regulation mechanism of government pork reserves and ensuring supply and price stability in the pork market.
Recently, the State Council issued the “14th five year plan” to promote agricultural and rural modernization, emphasizing the improvement of the long-term mechanism for the stable and orderly development of the pig industry, promoting standardized large-scale breeding, stabilizing the pork production capacity at about 55 million tons and preventing the ups and downs of production.
pork collection and storage start
price is expected to rebound slightly
Since July 2020, pork prices have entered the callback mode. According to the monitoring of the Ministry of agriculture and rural areas, the average price of pork in the national Shenzhen Agricultural Products Group Co.Ltd(000061) wholesale market on March 1 was 18.66 yuan / kg, up 0.6% from Monday.
Historical experience shows that after the start of pork purchase and storage, the decline of pork prices tends to narrow or rebound slightly. According to the statistics of securities times · databao, after the start of pork collection and storage, the pork price increased by an average of 1.03% in two weeks and 1.94% in four weeks. After the launch of the fourth pork purchase and storage last year, pork prices rose by 23.42% in less than a month. In the short term, pork purchase and storage can promote the rise of pig prices.
high cost increases promote capacity removal
The rise in upstream feed prices may push the industry to reduce production capacity. China’s feed prices rose significantly in February. The fattening compound in that month was 3.66 yuan / kg, up 1.11% month on month and 7.9% year-on-year in February last year The Zheshang Securities Co.Ltd(601878) research report believes that considering that the feed costs of corn and soybean meal remained high in the first half of the year, the capacity of the industry may be accelerated under deep losses, or the industry took the initiative to eliminate sows with offspring in the second quarter, the price of sows is expected to reach a new low, and the expectation of a new round of cycle reversal is continuously strengthened.
Under the catalysis of the decline of pork prices and the rapid rise of cost side feed prices, the breeding losses of pig enterprises are increasing, which promotes the process of de production capacity of the industry. According to the data of the Ministry of agriculture and rural areas, as of January 2022, the number of fertile sows in China had decreased by 42.9 million, with a month on month decrease of 0.9%. It has decreased month on month for seven consecutive months, with a year-on-year decrease of 3.7%, which is the first year-on-year decrease in the number of sows since the current pig cycle.
pig industry stocks rebounded recently
According to the statistics of data treasure, there are 25 stocks in the A-share market that distribute the pig industry. Previously, affected by the expectation of pork purchasing and storage, some stocks “beat ahead” rebounded to a certain extent, with Leshan Giantstar Farming&Husbandry Corporation Limited(603477) , Dongrui Food Group Co.Ltd(001201) february rising by 23.41% and 21.89% respectively, and Hunan New Wellful Co.Ltd(600975) , Hunan Zhenghong Science And Technology Develop Co.Ltd(000702) , Tangrenshen Group Co.Ltd(002567) rising first.
According to the statistics of data treasure, Beishang capital increased its positions in many pig industry concept stocks in February, and the positions of 10 stocks rose. The holdings of Wens Foodstuff Group Co.Ltd(300498) , Hunan New Wellful Co.Ltd(600975) and Hunan New Wellful Co.Ltd(600975) increased by more than 10 million shares, with Tecon Biology Co.Ltd(002100) , Tech-Bank Food Co.Ltd(002124) , Shanghai Maling Aquarius Co.Ltd(600073) and other stocks ranking first.
Wens Foodstuff Group Co.Ltd(300498) recently said in investor research that the expected target of the company’s sales volume in 2022 is about 18 million. The company’s existing pig farm has a completed production capacity of about 46 million. In the long run, the company’s primary plan is to gradually increase the output and achieve the maximum and full production Hunan New Wellful Co.Ltd(600975) announcement shows that in 2021, the company’s pig business developed steadily, and the number of pigs sold increased by 34.19% year-on-year.
From the perspective of institutional attention, seven pig industry concept stocks have received more than five institutional ratings, with the largest number of ratings of Muyuan Foods Co.Ltd(002714) , Wens Foodstuff Group Co.Ltd(300498) , Henan Shuanghui Investment & Development Co.Ltd(000895) , Beijing Dabeinong Technology Group Co.Ltd(002385) and more than 10.
