China’s pork prices drop for the first time in more than a year as shortage eases

BEIJING — Prices of pork in China fell for the first time in more than a year, after months of surging prices for the country’s most popular meat.

Pork prices fell 2.8% in October from a year ago, China’s National Bureau of Statistics said Tuesday. The drop was the first since February 2019, or more than a year-and-a-half ago.

Prices doubled last fall and continued their rapid rise into this spring as African swine fever killed swaths of pig herds in China. The pace of increase began to slow in the last few months.

Bruce Pang, head of macro and strategy research at China Renaissance, said Tuesday that the decline in prices was due to an increase in the supply of live pigs, and that he expects further year-on-year declines in pork prices in the current quarter.

Overall inflation in China as measured by the consumer price index is likely to decline, Pang said.

The consumer price index rose 0.5% in October from a year ago, the statistics bureau said. Overall food prices climbed 2.2%, with fresh vegetable prices rising 16.7%. Beef and lamb prices also rose, up 7% and 3.6%, respectively.

Looking ahead, China’s pork supply is set to recover further from the recent shortage.

Zhao Guangyu, agriculture goods analyst at Nanhua Futures, said the stock of reproductive sows has entered a period of “accelerated recovery,” according to CNBC’s translation of a Chinese-language statement.

Zhao expects imports of pork and central government auctions of meat from its frozen reserves to continue their increase through the end of this year, adding to supply while consumption demand remains steady.

For the first three quarters of the year, China’s imports of pork more than doubled from a year ago, the national customs agency said last month.

However, that growth is set to fade.

In China’s plans for the next five years, the central Chinese government has specifically stated that ensuring national food security will be a priority. That would reduce China’s reliance on agriculture imports from countries such as the U.S. and Australia, with whom Beijing’s relations have become tense

“After a torrid pace in 2020, China pork imports are forecast down 6 percent (in 2021) due to the rebound in domestic production,” the U.S. Department of Agriculture Foreign Agricultural Service said in a quarterly report dated Oct. 9. The agency predicts a 9% increase in Chinese pork production, but notes it will still be nearly 25% lower than prior to the disease outbreak.

Imports will account for only about 11% of Chinese pork consumption this year, according to data from the USDA Foreign Agricultural Service.

The report said U.S. pork exports next year will likely remain about the same, at 3.3 million tons as growth in Mexico, Japan and other markets offset weaker demand from China.