June 11, 2007

Tight supply drives up China pork export prices
 

Chinese meat companies are starting to raise their pork export prices on tight domestic pork supply.

With the rise in ethanol demand for corn and increased meat consumption by more prosperous domestic consumers, animal feed costs have risen by one-quarter in the past year, the Chinese government said.   

Coupled with a jump in pig veterinary medicine costs amid severe hog disease outbreaks, China's hog prices have stayed at high levels.

According to the agriculture ministry, April's live hog and pork prices climbed 71.3 percent and 29.3 percent respectively from March. Domestic live hog and pork prices also continued to register gains in May.

Meanwhile, some domestic consumers have turned to fish due to the rise in pork prices. While fish prices are also on the rise, pork prices are still increasing at a relatively faster pace.

In a bid to ensure sufficient domestic pork supplies, Prime Minister Wen Jiabao has called on local governments to pay pig farmers to increase production, and the commerce ministry is considering the distribution of pork from China's strategic pork reserves.