The seasonal spike in sniffles in the northern hemisphere could hamper the recovery in hog prices by playing on mistaken beliefs that the animals are linked to so-called swine flu, Goldman Sachs has warned.

The hog market possessed major ingredients for a price recovery, with producers cutting back on animal inventories and the global economic rebound pointing to higher consumption of pork.

"We continue to expect some tightening in fundamentals later this year and into 2010," a note from the investment bank said.

Prices are set to hit rocket more than 65% to 85.0 cents a pound over the next year, the bank added.

'Limited upside' 

However, the rise in viral illnesses will limit the revival, which has already seen the price of Chicago hogs rebound sharply from seven-year-lows hit last month.

"We believe that upside will remain limited in the near term, especially as we enter the flu season," Goldman Sachs said, noting "some customers' misunderstanding of the transmission of the 'swine flu'".

Chicago lean hogs for October stood at 51.45 cents a pound in morning trade on Tuesday, up 0.50 cents on the day, and 18.0% above a contract low hit a month ago.