25 October 2016
Prices of pork in China, at US$1.80 a pound, are now higher than elsewhere in the world. Photo: Bloomberg
Prices of pork in China, at US$1.80 a pound, are now higher than elsewhere in the world. Photo: Bloomberg

China: Hog heaven turns into pork hell

It seems like only yesterday that over half the world’s pigs lived in China, with the country boasting the world’s largest pork industry to feed a rising middle class.

In 2014, Chinese pork farmers produced 57 million metric tons of pork. That’s more than twice the amount of the meat produced in all 28 EU countries and five times the amount produced in the United States.

Chinese, who were just fine eating 17 pounds of pork a year in the ’70s, became the world’s biggest consumer of pork in 2012.

The average citizen is now pigging out on 92 pounds a year while Americans struggle to manage eating 60.

Today, says the Wall Street Journal, too few pigs are headed to markets in pork-loving China, leading to soaring domestic prices and a rush of pork imports from the US and elsewhere to fill the gap.

China’s insatiable appetite for boars, sows and piglets couldn’t be higher, but the hit on the pocketbook makes many squeal.

Prices of the key ingredient in everything from lunchtime pork dumplings to fiery Sichuan-style mapo tofu have risen 48 percent in China in the last year, the WSJ noted.

Prices of pork in China, at US$1.80 a pound, are now higher than elsewhere in the world. For comparison, pork in Europe sells on average for 65 US cents a pound.

The US exported 60.6 billion pounds of pork to China in the first two months of this year-almost six times what it shipped in the same period last year, according to the US Department of Agriculture.

“Declines in Chinese hog numbers and pork production have pushed prices to the highest level since 2011, triggering larger imports from all suppliers,” said Philip Seng, chief executive of the US Meat Export Federation, according to National Hog Farmer, a business magazine of the US pork industry.

Through February, exports were 86 percent above last year’s pace in volume (73,536 metric tons) and 50 percent higher in value (US$138.6 million).

Meanwhile, pork exports by volume to China from Europe-the world’s largest pork exporter-shot up 78 percent in January from a year earlier, to 116,574 metric tons, the WSJ said.

China was quick to downplay the economic impact, as some news outlets speculated that the rising price of pork could spark social upheaval.

(For reference, the Chinese eat so much pork that when its price goes up, the cost of other things rises, too. For the Communist Party, therefore, keeping affordable meat on the table is vital, not least for the stability of the economy, said The Economist.)

“Pork prices in China will continue to run high, but will not rise remarkably this year,” said the National Development and Reform Commission, the country’s economic planner.

Some farmers are reluctant to raise pigs after suffering low prices for years, even if the prices have actually been picking up, the NDRC explained, according to China Daily.

“This time, the price hike is decided by the demand and offer. The Chinese market is not so stable, as most of the Chinese farmers raise pigs individually, so they cannot sense the market fluctuations,” CCTV said.

The responses highlight the complexities facing Chinese authorities with “the economy apparently still mired in deflationary pressures at a wholesale level while ordinary Chinese are being assailed by raging increases in the cost of the essentials of life,” Business Insider said.

Given the importance of pork in the Chinese economy and diet, pork is at the center of the Chinese government’s food security strategy.

Chinese leaders have strengthened the nation’s emphasis on food security, which has long been equated with self-sufficiency.

They remain wary of reliance on other countries to provide pork for China’s large population, said Lexin Cai, author of China’s Astounding Appetite for Pork.

Millions of small pig farmers quit the industry last year after two years of low prices and the introduction of tough new environmental rules.

Their exit has reduced the number of breeding sows and curbed China’s ability to quickly rebuild its herd, AgWeek said.

Imports by China, which consumes about half of global pork supplies, may top 1 million metric tons for the first time in 2016, industry sources said, up at least 28 percent from 777,000 metric tons last year.

China also imports roughly the same amount of snouts, ears and trotters, which are considered delicacies.

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A strategist and marketing consultant on China business

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