July 12, 2011

 

Near-term pork prices seen to stabilise in China

Pork prices are expected to gradually stabilise in July or August as farmers increase their live hog stocks, a senior government official in charge of animal husbandry with the Ministry of Agriculture said Sunday (Jul 10).

 

Data from the National Bureau of Statistics showed pork prices in June surged 57.1% on-year, contributing about 21% to the nation's inflation as the Consumer Price Index (CPI) in the month jumped 6.4%, the highest level in three years.

 

The price has also climbed 11.4% from May as the price growth accelerated by 8.8 percentage points. Pork in Beijing on Sunday rose to RMB36 (US$5.5) per kg.

 

Wang Zhicai, director of animal husbandry under the ministry, said the high pork price was primarily due to the surging cost of raising hogs. "Feed-stuff and corn prices reached RMB2.18 (US$0.34)/kg on average in the first half of the year, that's up 10.7% from a year ago," Wang said.

 

"To raise a pig until it grows to 100 kg, the cost is RMB1,350 (US$209), and that's 23.3% more than last year," Wang said.

 

In the first six months, 4.8% less live hogs were sold on the market, Wang said.

 

"More farmers are choosing to work in cities, that means the number of individual breeders of live hogs is also going down, which has an effect on market supplies," Wang said.

 

According to data collected from 420 trade markets, pork prices in June shot up 66.5% on-year, while the price of live hogs grew 81.9% to reach RMB17.54 (US$2.71)/kg.

 

Wang said prices of live hogs are now at a relatively high level and that price increases of live hogs will be limited in the coming months.

 

He predicted price growth of hogs will gradually ease, but as hog-raising costs are high, hog prices will remain at a high level.

 

In order to stabilise the meat market, local governments should implement the central government's guidelines in rewarding major hog-raising counties and stepping up support for the construction of standardised hog farms, Wang said.

 

He urged local governments to provide assistance in addressing the needs for finance and land use from the hog-raising industry. Wang said experts from Beijing will be sent to villages to give training to hog farmers.

 

Wang said his department will also strengthen the monitoring of hog output and market changes in order to prevent big fluctuations of hog prices.