December 27, 2007

China pork prices up 53 percent on high demand and rising costs

Wholesale prices of pork in China gained 1.4 percent to RMB20.97 (US$2.86) a kilogramme, up 53 percent on-year, according to the Ministry of Commerce.

Gains in pork, currently at its 11th week, were due to growing demand and higher farming costs thwarting government's efforts to boost supply and tame inflation.

Guo Huiyong, analyst at Beijing Orient Agribusiness Consultant, said that pork prices would continuously climb as slaughterers are having trouble securing live hogs.

The government has offered farmers subsidized insurance for sows to boost production of pork following an outbreak this year of blue-ear disease.

Chinese officials aim to boost next year's production to 53 million metric tonnes, according to Agriculture Minister Sun Zhengcai.

The country's hog inventory may rise 6.5 percent by the end of this year, while the number of breeding sows may rise 9.4 percent, compared with a year earlier, the People's Daily newspaper reported.

However, industry observers estimated that pork supply would not pick up until the second half of 2008 due to traditional farming methods in face of more costly labor and animal feed. Epidemics such as blue-ear continues to be a major threat in the industry.