China to use pork reserves to stabilise market
By Hallie Gu and Dominique Patton, Reuters
June 8, 2021
BEIJING, June 9 (Reuters) - China’s state planner said on Wednesday it aimed to use state reserves of pork to stabilise hog production and prices, after a more than 50% plunge in pork and hog prices since the beginning of the year.
China’s pork industry is recovering from an outbreak of the deadly African swine fever virus that devastated the hog herd during 2018 and 2019, but prices this year have fallen far more steeply than expected, analysts said.
Current hog prices of about 15.6 yuan ($2.44) per kilogramme are below the break-even point for many farmers, which could push some out of business, and lead to a substantial hit to supply later on, said Li Ming, analyst with Myagric.com.
“The risk is high that the markets will be quite volatile,” he said.
The National Development and Reform Commission (NDRC) said in a statement it plans to improve the way its pork reserves operate to help stabilise hog production and pork prices...
... The NDRC said it would significantly increase its stocks but did not give further details.
It will also set up an additional temporary reserve that will play a more active role in setting prices by buying from the market when prices fall too low and releasing stocks when supplies become tight...
... Live hog prices have already started to pick up in many regions this week, ending a steep, months-long plunge that caught the market by surprise.
But talk of new disease outbreaks in the south and southwest in the last couple of weeks could trigger more panic selling by farmers...