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China’s F&B’s shares recovered gradually, pork prices declining amid on-going epidemic
CKN
2020/02/25 08:17:08
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Feb 25, 2020 (China Knowledge) - Last week, China’s food & beverage (F&B) sector ranked the eighteenth among 28 others in terms of price performance, up 4.1% overall with a notable rise in all market segments. Of all the counters in the F&B, 92 companies’ shares rose, while only 4 fell.

It is noticeable that the spike in prices caused by panic buying during the outbreak has been effectively contained. The average ex-factory price for white stripe pork in 16 provinces (including municipalities) was RMB 50.85 per kilogram, down 0.7% in a week, though up 212.2% YoY. The gradual recovery of logistics, coupled with cheap frozen pork to replenish the market, led to the small drop in pork price.

On Feb 21, China Merchants Reserve Management Centre (MRM) released another batch of 20,000 tons of frozen pork for market bidding to stabilize supplies. Due to the novel coronavirus epidemic, the local governments encourage traders to conduct the bidding through the Internet. Since this year, MRM has launched reserved frozen pork for six consecutive times, totaling 130,000 tons, easing the tight supply of pork greatly.

Last week, with the lifting of a road blockade in many areas (but, excluding Hubei Province), live pigs available to sell allocated to the southern market from the north region in bulk, prompting a simultaneous fall in prices of live pig and pork. In Hubei Province, though, pork price rose continuously due to delay in work resumption of companies engaging in slaughtering.

It can be expected that in the near future, the shortage of pork supply would be eased further with more pork import, the release of reserved pork and construction of pig farming projects.

To download this “China Food & Beverage Weekly” published on Feb 25 you can download from any major financial terminals including S&P Capital IQ, FactSet, Bloomberg, and Reuters Research Bank.

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