Events
On March 9, 2022, the National Bureau of statistics released the CPI and PPI data of February 2022: in February 2022, CPI increased by 0.9% year-on-year (the market expected 0.77%), and the previous value was 0.9%; PPI increased by 8.8% year-on-year (market expectation was 8.78%), and the previous value was 9.1%.
Comments
Low pig prices hedged the rise of oil prices, and the increase of CPI was generally stable. In February 2022, CPI increased by 0.9% year-on-year, higher than the market expectation by 0.77%; The growth was 0.6% month on month, an increase of 0.2 percentage points over the previous month. Affected by the Spring Festival and the fluctuation of national energy prices, the ring ratio of CPI has expanded slightly. In the CPI sub item, food rose by 0.9% year-on-year. Affected by the Spring Festival, the prices of fresh vegetables, aquatic products and fresh fruits rose by 6.0%, 4.8% and 3.0% respectively; The decline in pork prices expanded. In February, pork prices fell by 42.5% year-on-year, an increase of 0.9 percentage points over the previous month. At present, the pig stock is still high and the supply side is loose. In terms of demand, it is in the off-season after the festival, so it is difficult to significantly increase pig consumption, and the overall pig price may not rise sharply in the near future. Non food products rose 0.4% month on month, an increase of 0.2 percentage points over the previous month, mainly driven by the rise in energy prices. Low pig prices offset the rise in Spring Festival prices and energy prices, and the increase in CPI was generally stable.
Commodity prices rose, and PPI changed from decline to rise month on month. PPI rose 8.8% year-on-year, down 0.3 percentage points, higher than the market expectation of 8.78%, and increased 0.5% month on month from a decrease of 0.2% last month. Affected by factors such as the rise in the prices of international bulk commodities such as crude oil and non-ferrous metals, PPI changed from decline to rise month on month. In the PPI sub item, the price of means of production changed from a decrease of 0.2% to an increase of 0.7%, mainly because the sharp rise in international crude oil prices led to the rise in the prices of Petrochina Company Limited(601857) related industries. The price of means of living increased by 0.1% from flat. In terms of agriculture, part of the bulk grain prices rose due to covid-19 epidemic and extreme weather in the early stage of Shenzhen Agricultural Products Group Co.Ltd(000061) and the recent conflict between Russia and Ukraine exacerbated the fluctuation of grain prices. Russia is the world’s largest exporter of wheat, and Ukraine is an exporter of wheat, corn and other Shenzhen Agricultural Products Group Co.Ltd(000061) . The conflict between the two countries may affect spring sowing and grain export, or lead to the continuous rise of Shenzhen Agricultural Products Group Co.Ltd(000061) prices, and long-term food industry and feed enterprises may be affected. If the pressure of bulk Shenzhen Agricultural Products Group Co.Ltd(000061) cost is transmitted, the cost of feed enterprises will rise, and the industry is expected to accelerate the concentration to the leading enterprises with the advantages of procurement and formula.
The policy is that the east wind blows frequently, and the dark time has passed. The seed industry and breeding sector are recommended. Recently, the central government officially launched the collection and storage of 40000 tons. Although the amount is small and the bottom supporting effect is limited, it still releases the signal of bottom building of pig price. Pig prices continue to fluctuate at the bottom, adding to the conflict between Russia and Ukraine, increasing breeding costs, the deregulation of production capacity is expected to accelerate, and the inflection point of the cycle is expected to accelerate. In February 22nd, the No. 1 central document issued the document that in 2022, the minimum purchase price of rice and wheat should be raised appropriately, and the corn and soybean producers subsidies and rice subsidy policies should be stabilized. The grain prices of corn and soybean will be superimposed. The protection of grain yield will increase the enthusiasm of grain production, and the planting area is expected to increase. The penetration of high-quality seeds is expected to increase. Seed enterprises with superior and improved seed reserves are expected to increase both volume and price.
Investment advice
Pig prices continue to fluctuate at the bottom, adding to the conflict between Russia and Ukraine, increasing breeding costs, the deregulation of production capacity is expected to accelerate, and the inflection point of the cycle is expected to accelerate. It is suggested to pay attention to breeding enterprises with significant cost control advantages and stable operation. Enterprises with core variety advantages are expected to take advantage of the policy to continuously improve their market share. It is suggested to pay attention to the leading seed industry with obvious variety advantages. The rise of bulk Shenzhen Agricultural Products Group Co.Ltd(000061) price may affect the feed processing cost, and the pattern of feed industry is expected to accelerate to the head. It is suggested to pay attention to the leading Guangdong Haid Group Co.Limited(002311) .
Risk tips
Macroeconomic fluctuations; Non plague situation; Extreme weather effects, etc.
