An increase in the supply of frozen pork in Chongqing in south-central China has resulted in lower wholesale prices of fresh pork in this region, while pork prices in Nanjing, Jiangsu province have moved lower in line with price falls of grains and eggs in the city. On the whole, pork prices in China fluctuated by about RMB2.0/kg.

Wholesale pork prices in China had averaged RMB12.20/kg in August 2004, with prices on an upward trend since April and May this year. The increase in the pork prices during this period was relatively significant - the prices were about 50% higher than those in the same period in 2003.

According to China's Ministry of Agriculture, pork prices increased sharply this year owing to an increase in live hog production costs. Pork prices increased by about RMB130-160 per hog relative to the same period in 2003, and this has been attributed to higher production costs such as rising corn and feed ingredients prices. The seasonal lull for live hogs and poultry in the third quarter of 2004 was accompanied by the relatively high demand for pork during the Mid-Autumn festival in late September and the China National Day celebrations in the first week of October.

Analysts say the falling prices of grains and the impending peak season for pork production in the fourth quarter of 2004 are likely to lead to a drop in pork prices. However, the price falls would be moderated by an increase in pork consumption as the winter and spring seasons approach, so pork and egg prices are not likely to drop too substantially. Pork prices although expected to fall slightly are seen to remain at relatively high levels until the Chinese New Year celebrations in early to mid-February 2005.

After the China National Day holidays in early October, wholesale pork prices in a few of Beijing's major agricultural products wholesale markets have continued to fluctuate at high price levels. Officials from the Beijing Economic Affairs Bureau say lower pork prices are expected with the gradual pickup in pork supply from October onwards.

High pork prices in Chongqing, south-central China, since July have prompted an influx of frozen pork products into the area by rail from all parts of China. Since mid-September, as much as 350 metric tons of pork per day have arrived at Chongqing. Previously, the amount of pork was in the region of less than 250 metric tons per day. The increase in the supply of frozen pork in Chongqing has, to a certain extent, curtailed the rise in wholesale prices of fresh pork in this region, resulting in an average price drop of more than RMB1.0/kg. As at October 19, hind leg pork prices in Chongqing have fallen to around RMB16/kg.

Pork prices in Nanjing, Jiangsu province have also moved lower in line with the price falls of other food items in the city such as grains and eggs. In the local farm products markets, the selling prices of pork, large ribs and thigh meat have started falling by about RMB1-2/kg after the first week of October. However, pork prices at some of the city's meat specialty stores have remained mostly unchanged compared with the price levels before the China National Day holiday period.