20 February 2019
Pork prices have risen more than 25 percent this month. Photo: Bloomberg
Pork prices have risen more than 25 percent this month. Photo: Bloomberg

Abattoirs ‘push up pork’ after prices get the chop

Government-sanctioned collusion among slaughterhouses has been pegged as the diving force behind a sudden jump in pork prices after a six-month slump, Time Weekly reported Thursday.

Pork sold for an average 10.84 yuan (US$1.74) per kilogram on the mainland on April 30 before shooting up to 13.64 yuan by May 20, translating to a 25.83 percent rise over 20 days, according to commodity data firm SCI International.

Before the surge, pork prices had been in the doldrums and had fallen below 10 yuan in some regions to the lowest level in 15 years. The average price peaked at 15.88 yuan on Dec. 2 before hitting a low of 10.60 yuan on April 17.

SCI analyst Ji Guangxin was quoted as saying that disease outbreaks and extreme weather in 2013 and early 2014 pushed many pig breeders into deep financial trouble, forcing them to sell pigs at low prices.

But on April 17 the National Development and Reform Commission met representatives of pork slaughterhouses and processors to discuss ways to deal with the falling prices, Ji said.

He said he was told that the regulator asked the representatives to jointly raise pork prices, setting off the increases.

Ji said prices have also risen as breeders in the United States have been hit by disease outbreaks, pushing up the cost of imports.

Feng Yonghui, chief analyst at industry website, said pig breeders are now trying to rebuild stocks and wait for clearer price trends.

Feng said the present increase is basically artificial and lacks support from the fundamentals, raising the prospect of a price dip as soon as in two or three weeks.

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