Pork costs in China rose an average of 22.5% last month, compared to last year. It followed the highest recorded monthly increase of 25.6% in July, as the CPI also hit a two-year high of 2.7%. August’s rise came despite an unexpected slowdown in CPI inflation to 2.5%. China is the world’s largest consumer of pork, and the country’s government is keeping a frozen “reserve” supply as part of a vital stabilization policy. Ahead of last weekend’s Mid-Autumn Festival and China’s upcoming National Day on Oct. 1, authorities said they were releasing some stocks for the first time this year. Staple meat is the heaviest item in the food basket that economists use to determine the nation’s consumer price index, and the government stockpile is maintained to ensure supply and price stability. In 2019, pork prices rose to an all-time high after an outbreak of African swine fever spread across the country. The recent rise was attributed to high demand during the holiday season, high feed costs and the delayed impact of last year’s decline in breeding stocks. People were also at home and cooking more, some suggested. Chinese residents have been discouraged from traveling due to several Covid outbreaks and some have been placed on lockdown. “There are more people who eat pork as they have free time to cook,” said Ms. Wang, a 53-year-old industrial worker in Zhuhai. “On these holidays, families and friends gather to enjoy meals, so there is a growing need for pork.” Some producers were also accused of holding inventories, contributing to a supply shortfall. In July, China’s National Development and Reform Commission advised farmers to avoid an “unreasonable reluctance to sell,” saying hoarding pigs to fatten them or wait for better prices could lead to short-term shortages but also create a glut in the future. The reserve policy implies extraordinary government intervention. In March, the government announced it was buying 38,000 tonnes of pork after prices fell. Ensuring price and supply stability was related to the “vital interests of the masses,” said Dr. Wang Zuli, an expert in pig production monitoring and early warning at the Chinese Academy of Agricultural Sciences. “When the price of pork is low and farmers are losing badly, the government will raise the price of pigs by collecting and storing [ product],” he said. “When pork prices are high, the government will stabilize the price of pigs by releasing stocks.” China’s economy has been hit by an ongoing government policy of “potential zero” Covid, in which sudden and random lockdowns or movement restrictions have been imposed across the country. The slower rise in consumer prices last month was partly attributed to lockdowns and came as food prices rose 6.1% year-on-year in August, after 6.3% in July. Additional reporting by Xiaoqian Zhu and Reuters
