China's Central Planners Scramble to Control Runaway Food Prices
Skyrocketing consumer pork prices in China have led Communist Party planners to release meat from the national reserves to maintain the supply for national holiday celebrations, The South China Morning Post reported.
Reuters reported Tuesday that Beijing had authorized the release of 14,400 metric tons of frozen pork from state-controlled food reserves effective Friday. The move came ahead of the National Day holidays in the first week of October.
Many outlets have described the situation as China’s ongoing battle with “porkflation.”
The South China Morning Post reported it will be the third such release this month, with some of the frozen meat made available for the Chinese Mid-Autumn Festival from Sept. 10 to 12.
It said total monthly releases from national and regional pork reserves reached a record of 200,000 metric tons.
Pork prices spiked by about 22.5 percent in August when compared year-over-year, according to The Guardian. That followed the highest-ever month-over-month price increase of 25.6 percent in July.
Overall, pork prices in China have surged more than 50 percent compared to a year ago, the Morning Post reported.
Pork is a great economic indicator for China.
China battles ‘porkflation’ as price of popular meat soars
Staple’s cost jumps over 50% since May on supply squeeze, demand recoveryhttps://t.co/VdqCfZ1DYS
— Charles Mok 莫乃光 (@charlesmok) September 12, 2022
The Guardian noted that China is the world’s single largest consumer of pork.
In its report, the Morning Post said the going rate for the popular meat was 31 yuan ($4.40) per kilogram averaged across 22 provinces and cities. The Hong Kong publication, citing financial data services provider Wind, said that represented the” highest level since May 2021.”
“In the past four or five months, the price of pork has gone up very quickly, and I’m spending much less on pork now,” Zhu Yuyun, a 62-year-old Guangzhou retiree, told the Morning Post.
“I used to buy five ribs at a time for about 70 yuan, now I buy two ribs and the price is nearly 60 yuan,” Zhu said. Sixty yuan is about $8.50.
According to the report, Meng Wei, spokeswoman for China’s National Development and Reform Commission, addressed the issue in a statement on Monday, the Morning Post reported.
“As the National Day holiday approaches, the demand for staple foods such as vegetables and pork is booming,” Meng said. “Compounded by the unfavorable factors such as the spread of pandemic outbreaks and heavy rainfall in some places, the work of ensuring supply and price stability of staple foods is facing certain pressure.”
The Guardian reported the NDRC advised Chinese farmers in July against an “irrational reluctance to sell,” characterizing “hoarding” their pigs to fatten them up or to wait for better prices as a harmful practice that “could lead to short-term shortages but also create a glut in the future.”
Wang Zuli of the Chinese Academy of Agricultural Sciences said control over price stability and supply is in the “vital interests of the masses.”
“When the price of pork is low and the farmers lose severely, the government will boost the price of pigs by collecting and storing,” he said, according to the Guardian. “When pork prices are high, the government will stabilize the price of pigs by releasing reserves.”
Nikkei Asia reported on Sept. 11 that Chinese pork traders warned the release of additional frozen pork by the Chinese government might be ineffective.
“Most of our customers prefer fresh pork to frozen pork,” a pork merchant in Shanghai told the outlet.
“Customers these days are buying less than before the lockdown in April because household incomes are flat and pork prices are rising,” he added, citing a two-month COVID-19 lockdown in China’s financial capital early this year.
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