May 29, 2008

China slashes import duties on pork and animal feed

The Chinese government announced Wednesday that it would cut the import taxes on pork and some types of animal feed to augment food supply and cool inflation.

In April, food prices surged by 22 percent, threatening unrest ahead of Beijing Olympics.

China will cut pork duties by half to 3 percent; while soy and peanut meal used for animal feed will be slashed by 2 to 5 percent, the Finance Ministry said.

Analysts said that high prices for oil and other materials needed by farmers and factories are worsening pressures on retail prices.

Previously, the government has increased subsidies to farmers to raise more pigs and has raised the minimum guarantee price for wheat and rice.

However, the efforts experienced some setbacks after severe winter storms occurred in January and February.

The May 12 earthquake that devastated Sichuan province also damaged crops and roads, adding to shortage worries.

Sichuan accounts for 9 percent of China's food production, though authorities say the impact on supplies should be minimal.