The price of pork, a staple of the Chinese diet, are tumbling.
According to data released by China’s National Bureau of Statistics (NBS) today, prices fell by a further 3.4% in June, leaving the decline on a year earlier at 16.7%.
They’re “crackling” under the pressure, you might say.
The NBS said that plentiful supply contributed to the decline reported in June. Wei Li, China economist at the Commonwealth Bank, also noted that weak demand was a contributing factor.
Outside of shifts in the equilibrium price due to supply and demand factors, the scale of the annual drop largely reflects that prices were sky high this time last year due to dwindling supply, something that saw Chinese authorities take the unprecedented step of releasing emergency supplies to limit further price rises at the time.
More broadly, the plunge in pork prices over the past year has also corresponded with a noticeable decline in consumer price inflation over the same period.
The CBA’s Li says this is not usual given moves in Chinese food prices have been influential on inflationary pressures there in recent years.
“On a weighted basis, 62% of fluctuations in China’s overall CPI inflation over the past five years was caused by changes in food prices,” he says.
Despite the steep fall in pork prices, that was partially offset by higher costs for vegetables and fresh fruit over the same period, seeing the annual decline in food prices slow to 1.2% in June from 1.6% in May.