China’s Costly Pigs Irk Consumers, Help Producers

The long, red-brick structures in this village on the outskirts of Beijing contain some of this year’s fastest-appreciating Chinese assets: pigs.

Their owner Ma Shihong is in no rush to sell. Her fleshy, pale-downed porkers are worth 70 per cent more than last year on the market, with live pig prices, and their girth, growing daily.

“Each pig can grow about a half-kilogram a day, which means 10 yuan,” said Ma, 43.

Outside Ma’s tidy, air-conditioned office, 3,000 pigs sprawled in pungent rows of concrete pens, snuffling in anticipation of their evening corn-and-soybean meal.

The reluctance of pork producers like Ma to sell only accentuates this year’s pig shortage and high feed costs, which have led to record pork prices – the average pork price in China has shot up 57 per cent from a year ago.

Chinese policy-makers are struggling to contain inflation, which accelerated to a three-year high of 6.4 per cent in June from a year earlier, more than analysts had forecast.

Food prices – and pork, especially – have played an outsized role.

Pork prices account for only three per cent in the weightings of the consumer price index, but a 40 to 50 per cent spike in pork prices can haul the inflation rate up by 1.2-1.5 percentage points.

“Although pork prices represent a tiny proportion of the CPI basket, it is the most volatile component affecting consumer inflation,” said Ma Dongfan, a farm product analyst at CEBM, a research firm in Shanghai.

Pork is the most popular meat in China.

Price rises have been a source of social unrest in China before, and Chinese authorities are determined to bring it under control. Earlier this week, Chinese Premier Wen Jiabao assured consumers that pork prices would fall in the coming months.

In an effort to stabilize pork prices, the government pledged over the weekend to increase subsidies to farmers to help them boost live pig stocks.

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