Strong seasonal demand in the run-up to Chinese New Year in February, combined with icy weather, has driven up Chinese pork prices and raised concerns about inflation in China.
Data published by China’s Ministry of Agriculture shows prices for slaughter-ready pigs at Chinese Yuan Renminbi (CNY) 16.60/kg (US$2.66) in the first week of January, up from CNY15.4/kg in the first week of December.
A survey of 50 markets nationwide, released by the ministry on 4 January revealed that retail pork prices were up for the fifth consecutive week, to CNY22.36/kg, a rise of 8.6% over the five-week period. This follows on a survey of 36 cities by China’s Ministry of Commerce, which showed wholesale pork prices rose 0.9% on average between 24 and 30 December, although prices remained down 6.1% year-on-year.
A Ministry of Agriculture statement said the rise in prices was down to a surge in demand for cured ham products in the run-up to Chinese New Year, a festival that commences on 9 February.
The ministry also pointed to unusually cold weather, which hampered shipments of pork supplies, particularly in the country’s north, which experienced temperatures as low as -20°C on Christmas Day. Icy roads made deliveries of pigs to slaughter difficult, but also caused unusually high mortality rates among young pigs in key pig farming provinces, such as Heilongjiang, Liaoning and Shandong.
Local media in Sichuan, meanwhile, reported the release of carcases from the provincial government’s frozen reserves of pork, a mechanism used by Chinese authorities to guide the price of pork, considered a key driver of inflation in the country.
China’s consumer price index (CPI) rebounded to 2.5% in December, though pork and live pig prices remain lower than levels seen in 2011, when China’s imports of cheaper US pork reached record highs. In a bid to tame the country’s volatile pork price cycles, government has subsidised the development of larger-scale farms, with subsidies for quality sows being particularly generous.