Pork prices in China fall for the first time in over a year

BEIJING – Pork prices in China fell for the first time in more than a year, after months of soaring prices for the country’s most popular meat.

Pork prices fell 2.8% in October from a year ago, China’s National Bureau of Statistics said on Tuesday. The drop was the first since February 2019, more than a year and a half ago.

Prices doubled last fall and continued to rise rapidly this spring, as African swine fever killed swathes of pig herds in China. The pace of the increase has started to slow down in recent months.

Bruce Pang, head of macroeconomic and strategic research at China Renaissance, said on Tuesday that the drop in prices was due to an increase in the supply of live pigs and that he expects further declines year on year. pork prices in the current quarter. .

Headline inflation in China as measured by the Consumer Price Index is likely to come down, Pang said.

The consumer price index rose 0.5% in October from a year ago, according to the statistics bureau. Overall food prices climbed 2.2%, with fresh vegetable prices rising 16.7%. Beef and lamb prices also rose 7% and 3.6% respectively.

Going forward, China’s pork supply is expected to recover from the recent shortage.

Zhao Guangyu, agricultural commodity analyst at Nanhua Futures, said the stock of breeding sows has entered a period of “rapid recovery,” according to CNBC’s translation of a Chinese statement.

Zhao expects central government imports of pork and auctions of meat from its frozen reserves to continue increasing through the end of this year, increasing supply as demand for consumption remains stable.

For the first three quarters of the year, Chinese pork imports have more than doubled from a year ago, the national customs agency said last month.

However, this growth is bound to fade.

In China’s plans for the next five years, the Chinese central government has specifically stated that national food security will be a priority. This would reduce China’s dependence on agricultural imports from countries such as the United States and Australia, with which Beijing’s relations have become strained.

“After a breakneck pace in 2020, Chinese pork imports are expected to decline 6 percent (in 2021) due to the rebound in domestic production,” the US Department of Agriculture’s Foreign Agriculture Service said in a quarterly report dated October 9. a 9% increase in Chinese pork production, but notes that it will still be nearly 25% lower than before the epidemic.

Imports will only account for about 11% of Chinese pork consumption this year, according to data from the USDA’s Foreign Agricultural Service.

The report says U.S. pork exports next year are likely to stay roughly the same, at 3.3 million tonnes, with growth in Mexico, Japan and other markets offsetting weaker demand from China. .