Consumption Expenditure News
- Pork price rises foreleventh week
Date: 28-Dec-2007 Sources: (Shenzhen Daily)
PORK prices in China, the world's biggest producer and consumer of the meat, rose for an 11th week as demand and higher livestock farming costs thwarted government efforts to boost supply and tame inflation.
Food prices increased 0.3 percent in the seven days until Dec. 23, led by meat, cooking oil and grain, the Ministry of Commerce said yesterday. The wholesale price of pork, a staple in Chinese diets, gained 1.4 percent to 20.97 yuan (US$2.86) a kilogram, up 53 percent in the past year, according to the ministry's Web site.
The government, concerned about inflation and social stability, has tried to bring down pork prices by selling grain from reserves and subsidizing insurance against pig diseases. Food prices in the world's fastest-growing major economy rose 18.2 percent in November, spurring a jump to an 11-year high of 6.9 percent in the consumer price index.
The government has offered farmers subsidized insurance for sows to boost production of pork following an outbreak this year of blue-ear disease, an infection characterized by reproductive failure of sows and respiratory problems of growing pigs.
Pork output faces a critical time next year, the People's Daily newspaper said Tuesday, citing agriculture Minister Sun Zhengcai. The government aims to boost next year's production to 53 million tons, it said, without giving a comparison.
The country's hog inventory may rise 6.5 percent by the end of this year, while the number of breeding sows may rise 9.4 percent, compared with a year earlier, the newspaper said.
Measures taken so far have been insufficient because labor and other costs have risen, according to Hanver Li, managing director at Shanghai JC Intelligence Co., a research company. Average annual wages in China rose almost 20 percent in the year ending Sept. 30, according to the National Bureau of Statistics.
'There's a risk that pork prices may jump higher in the next few months,'' Wang Lin, analyst at Cofco Ltd. in Beijing, said Dec. 21. Higher prices had prompted some farmers to slaughter herds early, which might delay a full recovery in supply, he said. It can take as long as six months for hogs to reach market weight.
China's supply of pork might not pick up until the second half of 2008, Li said. 'Much of the inability to boost output immediately is structural,'he said.
'Farmers or rural families raising a few pigs every year as a sideline business to earn some extra cash have traditionally accounted for more than half of China's hog production.'Nowadays more costly labor and animal feed had rendered such farming methods less profitable, he said.
'With rising wages in the cities, it makes more sense for farmers to work at construction sites or factories than tending to the pig pen at home.'
Moreover, epidemics such as blue-ear disease wiped out about 1 million hogs last year, leaving many rural families financially devastated, Li said.
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