Hog short­age perks up pork prices

China Daily (Canada) - - FRONT PAGE - By ZHU WENQIAN in Bei­jing andWUYIYAO in Shang­hai

Pork prices rose in China for a third con­sec­u­tive month in July, a lean pe­riod for sales, due to a sig­nif­i­cant re­duc­tion in the num­ber of hogs avail­able for slaugh­ter, in­dus­try sources said.

In July, streaky pork prices were hov­er­ing at 27.27 yuan ($4.4) a kilo­gram, up 15.6 per­cent from the lev­els seen in April. Prices for pork hind legs were 27.04 yuan a kg, up 16.6 per­cent from April, ac­cord­ing to data pro­vided by the Na­tional Bureau of Sta­tis­tics.

In­dus­try sources said such high prices for pork have not been heard of in the last two years. The pre­vi­ous spike in pork prices oc­curred be­tween June 2010 and June 2011. Since then, the com­mod­ity prices have been con­stantly fall­ing and many farm­ers in­curred huge losses. The fall­ing yields led to a huge short­fall in the num­ber of pigs avail­able for slaugh­ter and sows, which in turn perked up prices.

Pork ac­counts for 2.9 per­cent of China’s Con­sumer Price In­dex and the higher prices may trig­ger a higher CPI in the sec­ond half.

“The gov­ern­ment ad­justs the weigh­tage of dif­fer­ent prod­ucts in the CPI ev­ery five years. Food ac­counts for about 32 to 33 per­cent,” said Niu Li, di­rec­tor of the eco­nomic fore­cast­ing depart­ment at the State In­for­ma­tion Cen­ter, a gov­ern­ment think tank.

“It takes about a year and a half for pork prices to peak af­ter bot­tom­ing out. The prices touched their bot­tom and then be­gan to pick up, and will keep ris­ing till the next pigs are fat­tened and ready for slaugh­ter in six or eight months.”

Some an­a­lysts ex­pect pork prices to see more hikes later this year. While that is good news for those who raise pigs, it is not for those who buy pork from gro­cery stores.

Du Yuan­gen, a 32-year-old sales­man at Jiangsu Food Group’s meat arm in a RT-Mart su­per­mar­ket in Shang­hai, said pork prices have spi­raled up­ward due to a sup­ply short­age and the in­creased avail­abil­ity of high­priced prod­ucts.

Pro­duc­ers in the pork sup­ply chain were af­fected by the low prices of the meat in late 2013 and 2014. Many pro­duc­ers could not break even and as a re­sult, cut herds to re­duce losses, said Du.

Lu Bing, a sales man­ager with a Hong Kong-based su­per­mar­ket chain in Shang­hai, said: “Or­ganic pork from pigs raised in free ranges and fed only on acorns can be re­ally ex­pen­sive. In the past, they only ac­counted for a very small por­tion of con­sumers’ daily cui­sine, but now more con­sumers are buy­ing such meat fre­quently.”

Lu said the most ex­pen­sive pork prod­uct, or­ganic chops from pigs raised in the Chang­bai Moun­tain area in North­east China is about 252 yuan per kg and has been among the su­per­mar­ket’s best-selling prod­ucts for sev­eral weeks.

Chen Jiao, an an­a­lyst with In­dus­trial Se­cu­ri­ties Co Ltd based in Fuzhou, Fu­jian province, said: “The num­ber of pigs in stock is ex­tremely low. The short­age of sup­ply has re­sulted in a price surge, and the trend could con­tinue till next year.”

Con­sumers have felt that pork prices have been ris­ing, but the im­pact on their din­ing is not that sig­nif­i­cant.

“On av­er­age, the pork price is about five yuan higher per kg than the be­gin­ning of the year. Now we choose to dine lighter, with less con­sump­tion of too oily and heavy meat. Once we de­cide to have pork for a meal, we­choose the high-qual­ity, branded meat. I spend about 100 yuan on pork each month, which is still at an af­ford­able level,” said Wang Yaqin, a 62-yearold re­tiree in Shang­hai. Con­tact the writ­ers at zhuwen­qian@ chi­nadaily.com.cn and wuyiyao@ chi­nadaily.com.cn

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