September 24, 2007

China releases pigs from reserves to curb rising prices

China has begun releasing pigs from its central reserves into the domestic market to stem rising pork prices, according to local media reports.

China is releasing 30,000 tonnes of live pigs from its central reserves between Sep 10 and Oct 15, under a joint plan from the Ministry of Finance and the Ministry of Commerce.

Pork, the staple meat in China, has been the chief commodity that was blamed in lifting inflation to an 11-year high.

The pigs from the central reserves will be released into 22 cities in stages and will be priced slightly lower than market prices.

In August, meat and poultry prices surged 49 percent from a year earlier, boosting the month's consumer price index growth to 6.5 percent.

In further efforts to curb inflation, China has ordered a freeze on prices in some commodities and told agencies to closely monitor prices.

Analysts said that releasing the pigs from the government's reserves would likely have little impact on broader inflation, with analysts saying the 30,000 tonnes was inconsequential. The nation consumes nearly five times as much in a single day.

Pork prices have soared in recent months due to shortages as a result of a decline in pig rearing, rising feed costs and an outbreak of a pig disease that killed more than 70,000 pigs, according to official figures.