... pork prices could soar by 70%, according to a senior Chinese official who declined to be named…
‘Pigageddon’ sees Chinese pork prices surge
African swine fever epidemic spurs a jump in food inflation, official figures reveal
By Asia Times
June 12, 2019
Hog hell forced up retail inflation in China last month as pork prices surged by 18% on the back of an African swine fever epidemic in the world’s second-largest economy.
Data from the National Bureau of Statistics showed that the Consumer Price Index, or CPI, hit 2.7% in May, the highest level in more than a year.
Overall food prices jumped by 7.7% last month compared to the same period in 2018.
Crop failure due to unseasonal weather also hit fresh fruit stocks with costs soaring by 26.7% from 14.8% in April.
“While Chinese diners, who account for half of the world’s pork consumption, may get upset about higher prices, the development is not a something that would cause wider market panic,” Bo Zhuang, the chief China economist at TS Lombard, told CNBC news.
“Pork prices have been on a roller-coaster for the last decade,” Zhuang added.
As for the broader producer price index, or PPI, it edged lower at 0.6% in May from 0.9% compared to the previous month.
Recognized as an important indicator of domestic demand, analysts at Nomura reported that economic “growth could slow further on escalating US-China trade tensions.”
“We expect Beijing to undertake further easing [or] stimulus measures to bolster confidence and to stabilize growth,” they added in a note.
Still, it was the rise in pork prices which grabbed the headlines.
Up to 200 million pigs could die, or be culled, in China this year after contracting African swine fever.
If that happens, pork prices could soar by 70%, according to a senior Chinese official who declined to be named.
In March, a report by Nomura backed up that assessment. The Japanese bank warned that prices could rise to 33 yuan (US$4.90) per kilogram by January 2020 from February’s figure of 18.5 yuan-per-kilogram. That would represent a 78% price hike.
“Despite the rise in pork prices, pig farmers may be reluctant to increase hog stocks on concerns about [African swine fever],” Nomura’s analysts said in the study.
“In this regard, the upturn of the hog cycle could last longer and drive pork prices higher than in previous hog cycles,” they added.
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