China’s Pork Consumption Risks Collapse as Prices Surge

 

·         Households are counting the cost of African swine fever

·         The nation’s appetite for the meat could shrink by half

 

Bloomberg News

November 4, 2019

 

Tang Jie, who works on a pig farm, says he used to get pork from the wet market near his home every day. But he hasn’t bought any in two months. And his favorite dish, stewed pork ribs with lotus root, has been cut from the menu at his local restaurant.

 

“We can barely afford the prices,” Tang, a resident of the southwestern Chinese city of Chengdu, said at a hog conference last month. “Restaurants are changing the menu, and using less pork because of the high prices.”

 

In south Beijing, small restaurant-owner Yang Yi says he’s had to risk losing customers by raising the price of his popular braised pork dish, Hong Shao Rou, by 17% to 68 yuan. He said he can’t otherwise absorb the higher cost of the meat, which spiked nearly 70% in September after hog numbers collapsed more than 40% from a year earlier because of African swine fever.

 

Tang and Yang are hardly alone in counting the toll of the deadly outbreak that has devastated hog herds in China. The astonishing surge in pork prices, the staple meat for Chinese people, could yet run many more months and on the way see consumption in the world’s biggest market halved. The question is whether that demand will ever come back.

 

“There’s simply not enough of the meat domestically, or globally, for China,” said Ma Chuang, deputy secretary general at the Chinese Association of Animal Science and Veterinary Medicine in Beijing.

 

At current prices, the country’s pork consumption could fall by 50%, said Cheng Guangyan, director at the farm ministry’s Institute of Food and Nutrition Development in Beijing.

 

Once the cheapest meat, pork dominated Chinese tables, accounting for more than 60% of animal protein consumption. Households are now switching to other sources, putting up the price of alternates like beef and poultry, alarming the government and giving the central bank an inflation headache. Even egg futures hit a record last week.

 

Record domestic pork prices have also driven the nation’s meat imports to heady levels. Overseas pork purchases jumped more than 70% in September from a year earlier, while beef was up over 50%, according to customs data.

 

And elevated prices could yet worsen the outlook as farmers delay slaughter to allow their pigs to grow larger while retaining more sows as breeding stock, said Jim Huang, head of independent consulting firm www.china-data.com.cn. Huang said he expects pork prices to hit 60 yuan a kilo by the end of 2019 as supply drops 70% from last year’s level...

 

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https://www.bloomberg.com/news/articles/2019-11-04/china-s-pork-consumption-risks-collapse-as-prices-surge