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· China’s Record-Breaking Pork Rally Set to Return After New Year
· Govt to free 20,000 tons of pork reserves
China’s Record-Breaking Pork Rally Set to Return After New Year
o China sold most of its pork reserves to help cool down prices
o Prices may pick up after the holidays, analysts warn
January 7, 2020
There’s less than three weeks to go until China rings in the Lunar New Year, but policy makers counting on the annus horribilis for pork to be over may be in for a shock.
Chinese government leaders have gone on the offensive to bring down boiling hot pork prices, buying the most ever from abroad and releasing thousands of tons from state reserves. That’s started to work, with prices sliding last month from record levels -- just in time for the new year celebrations on Jan. 25.
But this drop is set to be fleeting, analysts warn. African swine fever, the disease that’s gutted the nation’s pork industry, is still spreading, while the rush to sell from reserves means that stockpiles are likely almost empty, they said. Farms are also too scared to restock their hog herds, which means the country’s pork shortage will probably continue for a second year, they said.
“We expect pork prices to continue their rally after the holidays,” said Pan Chenjun, a senior livestock analyst with Rabobank in Hong Kong. “The drop is only temporary.”
The government began its campaign to cool surging prices more than six weeks ago, aiming to temper the market before the Lunar New Year, the country’s most important holiday and peak pork consumption season. The meat is a must for Chinese people during this time, with popular dishes including Jiaozi, a dumpling that is traditionally served on New Year’s Eve and is typically made from ground pork.
The commerce ministry has been releasing pork from state reserves every week since Dec. 12, delivering about 190,000 tons into the market so far. That’s caused a frenzy among some of the public, with shoppers in the southwest province of Guizhou snapping up the frozen pork in less than an hour, local media reported.
“The festival is too important, and the government has to make sure there will be enough supplies by frequent releases of its reserves,” said Pan.
The strategy has worked somewhat, with wholesale pork prices down 16% by the end of December. But that follows a 110% year-on-year gain in November to record levels that also saw consumer inflation surge to a seven-year high.
The supply deficit is likely to worsen after the Lunar New Year holidays, especially between February and April, as many farms were asked by the authorities to slaughter their pigs for the festival, said Lin Guofa, a senior analyst with a Beijing-based agriculture consulting firm Bric Agriculture Group.
“Prices have been brought under control” after boosting supplies in the short-term, Lin said. However, the government has used up almost all of its reserves, leaving the government less leverage over prices, he added.
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Govt to free 20,000 tons of pork reserves
via China.org.cn - January 7, 2020
China will release another batch of 20,000 tons of pork reserves to stabilize prices for the upcoming Spring Festival holiday, according to the website of China Merchandise Reserve Management Center on Thursday.
It is the second time for China to release the frozen pork this year after the first batch of 30,000 tons on Jan 3. Interested parties should register on the website of the center - mrm.com.cn - to compete in the bidding at 1 pm on Jan 9.
Pork, a staple in China, has seen its price soar since last year, due to the short supply affected by African swine fever and cyclical factors.
Chinese authorities have taken measures to help revitalize the hog production...