(Economic Observation) China's pork prices have risen excessively, "secondary warning", how will pig prices go in the later stage?

  China News Agency, Beijing, September 27 (Reporter Chen Su) According to the monitoring of the National Development and Reform Commission of China, from September 19 to 23, the weekly average retail price of lean meat in 36 large and medium-sized cities in China was higher than that of the same period last year. It rose by 30%, entering the second-level early warning range for excessive increases determined by the "Improving the Government's Pork Reserve Adjustment Mechanism and Doing a Good Job in the Work Plan for Guaranteeing Supply and Stable Prices in the Pork Market".

According to the plan, Chinese officials will release the fourth batch of this year's central pork reserves this week, and guide local governments to jointly release local government pork reserves.

  Why have pork prices in China soared recently?

Will it continue to rise in the future?

  According to the monitoring of the “National Agricultural Products Wholesale Market Price Information System” of the Ministry of Agriculture and Rural Affairs of China, from September 16 to September 22, 2022, the price of pork was 30.79 yuan per kilogram (RMB, the same below), an increase of 53.9% over the same period last year, an increase of 3% over the same period last year. A month ago (from June 17 to June 23, 2022), it rose about 46% from 21.09 yuan per kilogram.

  Regarding the current round of pork price increases, Li Guoxiang, a researcher at the Institute of Rural Development of the Chinese Academy of Social Sciences, told the China News Agency that there are three main reasons.

  First, with the arrival of the Mid-Autumn Festival and National Day holidays, pork prices have entered the peak consumption season, and seasonal factors are the main reason for this round of increase; second, after the previous adjustment of live pig production capacity, the problem of excess live pigs in China has been solved, and the previous pork price base was low , the price of pork has returned; third, the price of feed grain has risen, which has led to an increase in the cost of pig breeding.

  Li Guoxiang said that due to the ups and downs of pork prices in recent years, speculation in China's live pig market has increased, and the cyclical fluctuations in pork prices have become short-term.

For example, in June and July this year, pork prices were still relatively low, and they began to rise rapidly after August.

"In response to this change, the Chinese government's control measures on live pig prices are also more timely. Usually, in the early stage of the peak consumption season and the beginning of the rise in pork prices, they start to take measures to control and control the price of pigs, rather than wait until the price of pork rises sharply. ."

  In response to the recent rise in pork prices, the National Development and Reform Commission said it would release the fourth batch of central pork reserves this year this week, and instruct local governments to jointly release local government pork reserves.

  The Ministry of Agriculture and Rural Affairs of China also held a meeting on the 26th to study and deploy the work of stabilizing the production and supply of live pigs in the fourth quarter, emphasizing the need to strengthen the study and judgment of the production situation of live pigs, and requiring strong and effective measures to ensure the stable supply of pork in the fourth quarter, especially during major holidays.

  According to the pig data center of China Pig Network, on September 27, the price of live pigs (external three yuan) was 24.39 yuan per kilogram.

Li Guoxiang said that the price of live pigs is relatively reasonable at around 22 yuan per kilogram, which is more balanced for consumers and producers, and the current pork price is high.

  Regarding the trend of pig prices in the later period, Li Guoxiang said that supply determines the price. At present, the production capacity of live pigs in China is generally stable, and the stock of breeding sows, newborn piglets, and fattening pigs are all on the rise. unlikely.

  The Ministry of Agriculture and Rural Affairs stated that the current situation of live pig production and supply continues to improve. The number of breeding sows is at a normal level. The number of live pigs has increased for five consecutive months. The number of large pigs and the number of newborn piglets in large-scale pig farms are higher than last year. At the same level, the fat pigs to be listed in the later period are sufficient and the market supply is guaranteed.

  Li Guoxiang suggested that in addition to the government's timely action, the market micro-subjects - pig farmers should also rationally view the rise in pork prices and release the slaughter in time to prevent more people from entering the market to raise pigs after the sharp rise. The healthy and stable development of the market requires the joint maintenance of market players.

  The National Development and Reform Commission stated that in the next step, it will continue to release the central pork reserves in accordance with the market situation with relevant departments, and further increase the release if necessary to promote the smooth operation of the live pig market.