China’s hog industry: At the trough, mapping the path to recovery

Research evidence excerpt

China’s hog industry: At the trough, mapping the path to recovery

25 June 2026

Equity Research Report

China’s hog industry EquitiesFood Products

At the trough, mapping the path to recovery China

◆ Second-worst loss cycle since 2014 with self-breeding losses Yihui Sha* (Reg. No. S1700519100001)

for around 9 months HeadHSBCofQianhaiA-shareSecuritiesAgricultureLimitedResearch

yihui.sha@hsbcqh.com.cn

◆ Sow inventory reduction accelerates through 2Q26; supply +86 21 5066 2004

contraction from 4Q26e driving hog price recovery

* Employed by a non-US affiliate of HSBC Securities (USA) Inc, and is

not registered/ qualified pursuant to FINRA regulations

◆ Maintain Buy ratings on Muyuan, Wens and Haid Group with

unchanged TPs

Review: a record-breaking downcycle. China’s hog sector is navigating its second-

deepest loss cycle since 2014. The national hog price hit RMB9/kg in April 2026 − an

all-time low since 2014 − and is currently oscillating around RMB9.5/kg. Self-breeding

losses exceed RMB300/head, with over-RMB200/head losses persisting for over three

months, making this the second-worst loss amplitude and the second-longest severe-

loss episode on record. Despite pork being the cheapest animal protein source

(supporting resilient demand evidenced by cold-storage inventory at a three-year high),

oversupply has kept prices suppressed. The root cause traces back to May 2025, when

MARA guided corporate producers to cut sow inventories, and while they complied,

non-corporate producers expanded capacity, worsening the supply overhang for 1H26.

Our estimates show that adding 10,000 head of sows against the policy tide in May

2025 would have incurred significant losses in March 2026 and onward.

Outlook: capacity depletion underway; hog price inflection in 4Q26e. We