(Economic Observation) China’s pork prices have dropped for ten consecutive years.

　　China News Agency, Beijing, April 13th (Reporter Chen Su) After the Spring Festival, the price of pork in China took a "slide".

According to the monitoring of the Ministry of Commerce of China, since late January (January 18-24), the wholesale price of pork has fallen for ten consecutive weeks, and the price of pork has fallen by about 27%.

After nearly two years of high prices, is China's cheap pork finally coming back?

Data map: Consumers are buying pork.

Photo by China News Agency reporter Zhang Yun

　　On the 13th, the reporter saw in a supermarket in Fengtai District, Beijing, that the price of pork belly was only 18 yuan (RMB, the same below)/shijin, returning to the "1 era".

A supermarket salesperson told reporters that the price of pork has "really dropped a lot" recently.

　　According to the monitoring of the National Agricultural Products Wholesale Market Price Information System of the Ministry of Agriculture and Rural Affairs, last week (April 2, 2021-April 9, 2021), the price of pork was 33.84 yuan/kg, down 5.4% month-on-month and 27.5% year-on-year , And in late January this year, the wholesale price of pork was about 47 yuan/kg.

　　The latest data shows that as of 14:00 on April 12, the average price of pork in the national agricultural product wholesale market was 31.27 yuan/kg, which continued to drop by 3.5% from last Friday.

The downward trend in pork prices continues.

　　Experts pointed out that, in addition to the continuous fall in pork prices after the Spring Festival, the decline in pork prices is also a manifestation of the recovery of China's live pig production capacity.

　　Affected by the African swine fever epidemic, China's live pig production capacity dropped sharply in 2019, and pork prices rose accordingly.

After Chinese officials took measures to support the resumption of production, the production capacity of live pigs was gradually restored.

　　According to the monitoring of the Ministry of Agriculture and Rural Affairs, the number of reproductive sows nationwide in January and February this year increased by 1.1% and 1.0%, respectively, and 35.0% and 34.1% year-on-year.

At the end of February, the national stock of reproductive sows was equivalent to 95.0% of the end of 2017, and the national stock of live pigs remained above 400 million.

In February, the slaughter volume of designated pig slaughter enterprises above designated size nationwide was 14.24 million heads, a year-on-year increase of 71.2%.

　　The relevant person in charge of the Ministry of Agriculture and Rural Affairs said that under the dual effects of market stimulus and policy incentives, the supply of live pigs in the market has continued to improve. The most tight period of pork market supply has passed, and the supply-demand relationship will become more relaxed in the later period.

　　However, in the normal years before 2018, the wholesale price of pork in China was less than RMB 20/kg.

Will pork prices continue to fall?

　　Li Guoxiang, a researcher at the Institute of Rural Development of the Chinese Academy of Social Sciences, said in an interview with a reporter from China News Agency that as the supply situation improves, the cost will ultimately determine the price.

Usually 3 catties of feed will produce 1 catty of pork, and 1 catty of feed is about 2 yuan, so the cost of 1 catty of pork is about 6 yuan.

"The cost of domestic and international pork farming is below 10 yuan/jin. As the supply continues to recover in the later period, the price of pork will eventually return to the normal level."

　　Li Guoxiang said that under the influence of the high profits of pig raising, many pigs with low farrowing rates and low productivity in the Chinese pig market are difficult to be eliminated.

As pork supply continues to improve and pork prices continue to decline in the later stages, these backward production capacities will also be eliminated at an accelerated rate, and pork prices will also be more likely to bottom out.

　　In order to improve the efficiency of live pig production and reduce the impact of the "pig cycle", China specifically proposed in the No. 1 Central Document in 2021 to accelerate the construction of a modern breeding system, protect the basic production capacity of live pigs, and improve a long-term mechanism for the stable and orderly development of the pig industry.

　　The Ministry of Agriculture and Rural Affairs predicts that by around June this year, the number of live pigs will be fully restored to the level of 2017.

In the second half of the year, the country's live pig production and pork supply are expected to fully return to normal. By then, the pork supply situation will become more and more loose. From the price point of view, pork prices will continue to decline year-on-year.

(Finish)