Chinese government takes measures to stabilise pork prices

- Last updated on GMT

In a bid to stabilise pork prices, which have been in freefall over the last three months, the Chinese government has begun to purchase frozen pork to add to reserves, according to the country's economic planning agency.

The fall is a result of cyclical and seasonal factors, with the hog-to-corn price ratio staying under 6:1 for the last four weeks. This major indicator of the industry’s profitability requires prices to be above this mark in order for farmers to break even.

Accordingly, the government has purchased frozen pork at prices slightly above market price, the National Development and Reform Commission said in a statement. 

The oversupply of hog is expected to continue for a period of time, the NDRC said, asking farmers to watch the markets closely and adjust their production plans.

Food prices have a one-third weighting in the calculation of China's consumer price index, a major gauge of inflation, with pork prices being an important component.

Stabilising pork prices is an important task for the government in taming inflation and deflation.

Related topics: Markets, Meat, China, East Asia

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