China will carry out its second round of frozen pork stockpiling this year for state reserves after live hog prices in March fell to their lowest level in nearly eight years, as policymakers seek to cushion a deepening plunge that is hurting rural incomes and adding to deflationary pressure.
The Ministry of Commerce said on Thursday that it would work with the National Development and Reform Commission (NDRC) and the Ministry of Finance to undertake pork stockpiling.
“The Ministry of Commerce will continue to closely monitor the pork market, strengthen trend analysis, and coordinate with relevant departments to manage reserves and ensure market stability,” the ministry said in a statement on its website.
The authorities’ reserve purchases are typically deployed when hog prices fall quite sharply and trigger official warning mechanisms, making them a closely watched signal of official concern.
Frozen pork is seen at a supermarket in Beijing. Photo: Shutterstock
Beijing carried out a round of pork stockpiling for its state reserves in March, after undertaking several such purchases last year to stabilise the country’s volatile pork market.
Pork prices have a huge influence on China’s consumer price index (CPI) due to their substantial weight within the food category, as the weighting remains high despite a recent downward revision. The falling prices are also squeezing millions of the country’s pig farmers just as the US-Israel war on Iran is pushing up global oil, grain and feed prices, raising their production costs.