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China's Pork Price Extends Gains on Demand and Pushes Up Costs

by 5m Editor
27 December 2007, at 7:18am

CHINA - Pork prices in China, the world's biggest producer and consumer of the meat, extend gains for an 11th week as demand and higher farming costs thwarted government efforts to boost supply and tame inflation.

Food prices increased 0.3 percent in the seven days to Dec. 23, led by meat, cooking oil and grain, the Ministry of Commerce said today. The wholesale price of pork, a Chinese staple, gained by 1.4 percent to 20.97 yuan ($2.86) a kilogram, up 53 percent in the past year, according to the ministry Web site.

The government, concerned that inflation may disrupt social stability, has sought to lower pork prices by selling grain from reserves and subsidizing insurance against diseases. Food prices in the world's fastest-growing major economy rose 18.2 percent in November, spurring a jump to an 11-year high of 6.9 percent in the consumer price index.

Gains in pork will "likely continue as slaughterers are reporting trouble getting live hogs," said Guo Huiyong, analyst at Beijing Orient Agribusiness Consultant Ltd. in Beijing. "The situation probably won't improve much next year."

The government offered farmers subsidized insurance for sows to boost production of pork following an outbreak this year of blue-ear disease, an infection characterized by reproductive failure of sows and respiratory problems of growing pigs.

Source: Bloomberg.com

5m Editor