Government policies effective in keeping pork prices down in China

As of June 19, hog prices in major hog-production provinces like Sichuan, Hubei and Anhui ranged between RMB13-16/kg.

Ever since the start of 2007, the Chinese government has implemented various subsidies to boast hog production and to slow down the rate of increase of hog prices.

Apart from that, the government has also restricted pork exports to ensure sufficiency within the country. According to the China Customs, China exported 24,000 tonnes of pork between January and April 2008. This is a fall of 54.4 percent on-year.

In addition, China has been trying to encourage pork imports. On May 28, the government announced a reduction of frozen pork import taxes from 12 percent to 6 percent starting June 1 to December 31.

Government policies and increasing inventories have been effective in keeping pork prices down currently. However, the rise of feed costs will support firm pork prices.

RMB1 = US$0.1454 (June 20)