Excuse the pun, but Chinese pork prices are sizzling.
Buried away in the April consumer price inflation (CPI) report released by China’s National Bureau of Statistics (NBS) earlier today came the news that pork prices in China surged in the year to April, gaining 33.5%.
Prices are hot, and accelerating, jumping even more than the 28.4% year-on-year increase seen in March.
The immense price gains, courtesy of strong demand and relative low reserves compared to consumption levels, has seen led to the Chinese government taking some drastic action to alleviate price pressures — they’ve released emergency pork reserves.
According to the state-run Chinese news agency Xinhua, the Beijing government announced last Tuesday that it would release an unprecedented 3.05 million kilograms of frozen pork reserves into the capital’s market over two months to contain the price surge.
The report stated that prices in the capital had risen by an amazing 50.6% from one month earlier.
It was the first time the Beijing government has released pork reserves to the market, following the launch of a “life necessity reserve mechanism” in 1992 to create reserve systems to stabilise prices of essential consumer goods.
In coordination with the release of emergency reserves, the Beijing government announced that it would provide subsidies of up to RMB 9 per kilo to encourage vendors to lower prices. It also stated that it will encourage slaughterhouses to increase pork production by 20% through the introduction of additional subsidies over the same period.
To alleviate price pressures elsewhere in the country, officials in Zhejiang and Shaanxi have increased the supply of frozen pork from reserves since December 2015 according to Xinhua, releasing about 150,000 tonnes of pork reserves into the market.
The news agency reports that the average wholesale pork price hit 25.8 yuan (US$3.96 dollars) per kilogram in the final week of April, up 14.1% from levels seen at the beginning of the year.
One official at China’s Ministry of Finance stated that pork prices will stay high this year, but suggested that the price gains were controllable since the government had taken measures to ensure a stable pork supply.