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Chinese Pork Prices to Stay High

by 5m Editor
21 April 2008, at 10:51am

BEIJING - Chinese pork prices, which have helped drive inflation to 12-year peaks, are likely to stay high well into the summer, until farmers like Shao Zuohuan can bring new pigs to market, writes Langi Chiang.

In a report for Reuters, featured in the Guardian, Chiang comments that Chnese pig farmers have lost more than 4 million piglets - due to harsh weather conditions.

Beijing has offered subsidies since last summer to encourage farmers to raise pigs, after widespread disease coupled with poor profits the year before caused the pig population to drop by 10 percent and prices to shoot up. Experts had expected pig stocks to recover by the second quarter of 2008. But snow that blanketed southern China caused sties to cave in and blocked transport of feed, leaving piglets to freeze or starve and ensuring high prices would last longer than expected.

"The cold winter froze many piglets to death and distorted efforts to build up stocks," said Qi Jingmei, a senior economist at the State Information Centre, a top government think tank.

China's pig stocks rose 1.6 percent in the first three months of 2008 from a year earlier to 415.21 million head, the National Bureau of Statistics said last Wednesday.

China National Grain and Oils Information Centre, another state-backed think tank, estimates that pig stocks in the first quarter were up by 4.7 percent, adding in a weekly report that feed demand was likely to show signs of recovery soon. However, an official from the statistics bureau said it was hard to tell whether the stock of pigs would increase substantially by the second quarter because earlier forecasts had not reckoned with the winter storms.

For Shao, that's good news. He feels "very lucky" to have lost only three piglets and he has about 100 left with 12 sows, he said. He plans to breed and sell about 200 hogs this year, the same as in 2007.

"Pork prices are now very high, and market demand exceeds supply. We don't have to worry about selling them at all," the farmer said, with a big laugh.

He and his wife earned about 80,000 yuan ($11,440) last year, four times the income of relatives who migrated to cities to work. Almost all his neighbours are now raising pigs, and most of them plan to increase their stock. "With a dozen sows, couples don't have to leave the farm to find work," Shao said.

View the Guardian story by clicking here.

5m Editor