China's pork costs fall for the primary time in additional than a 12 months as shortages put on off
Breeders feed piglets at a pig farm in Bijie, China's Guizhou Province on May 12, 2020.
Deng Gang | Visual China Group | Getty Images
BEIJING – Pork prices in China fell for the first time in more than a year after prices of the country's most popular meat rose for months.
Pork prices fell 2.8% yoy in October, the Chinese statistical office said on Tuesday. The decline was the first since February 2019 or more than a year and a half ago.
Prices doubled last fall and continued to rise rapidly this spring as African swine fever killed swaths of swine herds in China. The pace of growth has started to slow in recent months.
Bruce Pang, head of macro and strategic research at China Renaissance, said Tuesday that the drop in prices was due to an increase in the supply of live pigs and that he expects pork prices to decline further in the current quarter from a year earlier.
Headline inflation in China, as measured by the consumer price index, is likely to fall, Pang said.
The consumer price index rose by 0.5% in October compared to the previous year, the statistics office announced. Overall, food prices rose 2.2% while fresh vegetable prices rose 16.7%. Beef and lamb prices also rose 7% and 3.6%, respectively.
Looking ahead, China's pork supply will continue to recover from the recent shortages.
Zhao Guangyu, an agricultural commodity analyst at Nanhua Futures, said the reproductive sow herd has entered an "accelerated recovery" phase, according to a Chinese-language statement from CNBC.
Zhao believes that pork imports and the central government's auction of meat from frozen reserves will continue to increase and increase supply through the end of this year while consumer demand remains stable.
In the first three quarters of the year, China's pork imports more than doubled year-on-year, the national customs authority announced last month.
However, this growth will fade.
In China's plans for the next five years, the central Chinese government has explicitly stated that ensuring national food security will be a priority. This would reduce China's dependence on agricultural imports from countries with which Beijing's relations are strained, such as the US and Australia
"After a breakneck pace in 2020, Chinese pork imports are forecast to rise 6 percent (in 2021) due to the recovery in domestic production," the US Department of Agriculture said in a quarterly report dated Oct. 9. The agency forecasts a 9% increase in Chinese pork production, but it will still be nearly 25% lower than it was before the disease broke out.
According to the USDA Foreign Agricultural Service, imports will only account for about 11% of China's pork consumption this year.
According to the report, US pork exports are likely to stay roughly flat at 3.3 million tons next year as growth in Mexico, Japan and other markets offset weaker demand from China.