Chinese pork prices hit an all-time high, spark government action

Chinese pork prices rose to a record high in August, forcing the government to use the nation's meat reserves for the first time this year to secure supplies for the holidays.

Last month, prices for pork in China increased on average by 22.5% compared to the same period in 2017. It came after the largest recorded month-over-month increase of 25.6% in July, when the CPI also reached a two-year high of 2.7%. Despite an unexpected drop in CPI inflation to 2.5%, August's increase nonetheless took place.

China is the largest consumer of pork in the world, and as part of a crucial stabilisation strategy, the government of the nation keeps a frozen "reserve" supply in hand.

Add WION as a Preferred Source

The authorities announced they were releasing some reserves for the first time before the mid-autumn festival last weekend and China's upcoming National Day on 1 October, as reported by the Guardian.

The government reserve is kept to assure supply and price stability, and the staple meat is the food item that economists weight the most strongly when calculating the country's consumer price index. Following a nationwide outbreak of African swine disease in 2019, pork prices reached a record high.

High demand during the holiday season, high feed prices, and the lingering effects of the reduction in breeding stocks last year are all blamed for the latest increase. Some said that people were preparing more meals at home. Several Covid outbreaks have made it difficult for Chinese citizens to travel, and some had been placed in lockdown.

Additionally, several producers were charged with hoarding stock and causing a supply shortage.

The National Development and Reform Commission of China warned farmers in July against a "irrational reluctance to sell," warning that keeping pigs to fatten them up or wait for better prices could cause shortages in the short term but also result in a glut in the future.

An ongoing government "dynamic zero" Covid policy, which has resulted in abrupt and arbitrary lockdowns or mobility restrictions across the nation, has severely harmed China's economy. The lockdowns were partly to blame for the slower increase in consumer prices last month, which occurred as food prices increased 6.1% on an annual basis in August after increasing 6.3% in July.

WATCH WION live TV here: