China mulls dipping into pork reserves to rein in costs

Chinese authorities could dip into strategic pork reserves in a bid to rein in prices of the staple meat, Beijing's top economic planner said Tuesday.

Pork prices in the world's second-biggest economy spiked late last month, with the meat selling for 32 percent more than in June 2021 as market supplies dropped, state media Xinhua News Agency reported.

The spike came on the back of "irrational behaviours such as blindly holding supplies and reluctance to sell in the live pig market," the National Development and Reform Commission (NDRC) said in a notice on social media.

The NDRC said that reluctance was aimed at boosting profits and ordered major suppliers to slaughter pigs at a "regular pace", warning them against hoarding, Xinhua said.

On Tuesday, the commission added that it was "looking into a release of central pork reserves".

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It has also instructed local governments to release supplies "in a timely manner" to guard against sharp price hikes.

China has largely been spared the impact of a global surge in food prices caused by Russia's war in Ukraine.

But pork prices were hit hard after the country's herds were devastated by African swine fever in recent years, causing consumer inflation to spike.

In 2019, authorities said they would free up land to restore pork production to pre-swine fever levels, and officials have since released supplies from reserves to rein in rising costs.

"As the prices of hogs continue to rise, pig farmers are turning losses into profits... farmers are now profiting about 60 yuan (about $9) per head," Ministry of Agriculture and Rural Affairs hog expert Wang Zuli told state broadcaster CCTV in an interview in June.

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"We can say the darkest days for pig farmers are over," Wang said, adding that pork supplies were expected to grow.

Source: AFP