Central Government Resumes Frozen Pork Reserve Purchases, Pork-Related Stocks Rally
April 2, 2026, 4:57 PM
GAPS-Global
112
Guide
Highlights at a glance
On April 2, 2026, China's pork sector rallied strongly, led by Huisheng Biology's 10% surge, following the government's announcement of a second round of central frozen pork reserve purchases. Key agencies—the NDRC, MOFCOM, and Ministry of Finance—are coordinating the intervention to stabilize the market. Current data reveals severe pressure: live hog prices hit an eight-year low at 10.68 yuan/kg, with the pig-to-grain ratio falling to 4.40:1, well below the warning threshold. Overcapacity persists, with breeding sow inventories exceeding official limits. While short-term oversupply may continue into early 2026, analysts project easing pressure in the second half as capacity reduction takes effect. Investors are advised to focus on low-cost producers like Muyuan and Wens Group for potential recovery opportunities.
April 2, 2026 – The pork sector demonstrated strong performance today, with Huisheng Biology surging over 10%. Other notable gainers included Huatong Co., Ltd., Tekang Biology, Dayu Biology, Lihua Co., Ltd., Sunner Group, Muyuan Co., Ltd., Giant Agro-Pastoral, Aonong Biology, and Wens Foodstuff Group.
Government Intervention to Support Market
Key government agencies will launch the second round of central frozen pork reserve purchases this year. The National Development and Reform Commission (NDRC), Ministry of Commerce (MOFCOM), and Ministry of Finance will coordinate these efforts, with local governments requested to conduct simultaneous purchases. This coordinated approach aims to better leverage the regulatory function of reserves.
The NDRC and other departments have stated they will:
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Closely monitor the live pig market
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Intensify reserve purchase efforts
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Strengthen comprehensive production capacity regulation
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Guide producers in rational production planning
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Promote stable market operations
Market Data and Industry Analysis
Current Market Conditions
According to the Ministry of Agriculture and Rural Affairs monitoring data:
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National average live pig price: 10.68 yuan per kilogram (fourth week of March)
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Month-on-month change: -3.3%
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Year-on-year change: -29.8% (eight-year low)
Profitability Indicators
The pig-to-grain ratio (live pig farm-gate prices to corn wholesale prices) has reached critical levels:
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Current ratio: 4.40:1 (third week of March)
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Historical context: New low since 2019
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Warning threshold: Significantly below the 5:1 primary warning line
Supply-Demand Dynamics
Supply Side Analysis
Core issue: Supply-demand mismatch due to overcapacity
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2025 year-end breeding sows inventory: 39.61 million head
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January 2026 inventory: 39.58 million head
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Normal inventory upper limit: 39 million head (set by Ministry of Agriculture)
Demand Side Trends
Declining pork consumption share:
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2018: 62.1% of total meat consumption
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2025: 57.9% of total meat consumption
Future Outlook and Projections
Short-Term Forecast
Dongxing Securities analysis:
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Short-term oversupply trend expected to continue
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First half of 2026 likely to see continued price pressure
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Supply pressure expected to ease in second half as capacity reduction takes effect
Capacity Reduction Opportunities
Shanxi Securities perspective:
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First half may present a good window for capacity reduction
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Potential for third significant capacity reduction since 2021
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Industry fundamentals and valuation could see recovery
Investment Recommendations
Guosheng Securities insights:
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By end-March, lean-type market pig prices fell below 10 yuan/kg
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Higher-cost participants face volume reduction pressure
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Key investment focus: low-cost pig enterprises
Recommended companies for consideration:
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Dekang Agriculture & Animal Husbandry
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Wens Foodstuff Group
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Muyuan Co., Ltd.
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Lihua Co., Ltd.
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Giant Agro-Pastoral
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Tekang Biology
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Zhengbang Technology
Conclusion
The pork industry currently faces significant challenges due to overcapacity and declining prices. However, government intervention through reserve purchases and the natural market correction through capacity reduction may pave the way for industry recovery in the latter half of 2026. Investors are advised to focus on low-cost producers with strong fundamentals during this period of market adjustment.
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