September 11, 2007

 

China's live pig supply shortfall seen until 2008

 

 

Supply shortage of live pigs in China will not change "fundamentally" until the second quarter next year, Bi Jingquan, vice minister of the National Development and Reform Commission (NDRC) said on September 4.

 

In a press conference, Bi said despite price hikes of pork and piglets and other related governmental policy incentives, hog raising still takes time.

 

He said a number of piglets depend on the number of sows in stock which could take a year and half for piglets to grow into sows and in turn bear more piglets for sale.

 

Nonetheless, production of beef, mutton and poultry have increased this year, as milk production rising by 24 percent yearly, Bi said.  The increases mean that supply of non-staple food as a whole is sufficient which will also curb the price rise of pork to some extent.

 

Due to short supply and mounting production costs, the price of pork, a common food of the Chinese, has almost doubled over the first seven months this year.

 

In August, however, the pork price had been on the decline for three consecutive weeks, with the price between August 20 and 26 down 3.3 percent week-on-week, according to the Ministry of Commerce.

 

Bi noted that short-term turbulence in the pork market was still "inevitable", adding the demand for pork could rise as the weather becomes cooler and the mid-autumn festival and National Day draw near.

 

But in the long run, the pork price is unlikely to increase by a large margin, Bi said, adding the likelihood of China importing pork in large quantities was "very small".

 

He explained that only a few countries would satisfy China's demand if the world's largest pork producer were to import one million tonnes of pork or more from overseas every year. The country's pork output reached 52 million tonnes last year, more than half of the world's total, the official said.

 

Led by the rising price of pork, food prices have been climbing in the past several months, pushing the consumer price index (CPI), a main barometer of inflation, up by more than 3.5 percent on average for the first seven months. The CPI in July hit 5.6 percent, the highest for 33 months.

 

Li Huiyong, senior economist with Shenyin Wanguo Securities was quoted by the China Business News as saying that the CPI could rise 5.8 percent in August and exceed six percent in October.

 

On Sept. 3, the General Logistics Department of the People's Liberation Army (PLA) ordered all units to "take forceful measures" to ensure a stable food supply for soldiers.