'Golden Week Boost' Fades... Pork Prices in China Fall Amid 'D' Fears

Bloomberg: "Pork Prices Plunge 21% Over the Past Year"

Scenery of Beijing Railway Station ahead of China's National Day in 2023. Photo by Yonhap News Agency

As China approaches its largest holidays, National Day and the Mid-Autumn Festival, the price of pork-a key indicator of consumer prices in the country-has hit its lowest level in the past 18 months.

According to Bloomberg News on September 30, the wholesale price of pork in China fell to 19.8 yuan per kilogram as of September 19, marking the lowest level since March of last year. Even in the middle of this month, prices had remained in the 20-yuan range, but that threshold now appears to have been broken. Over the past year, the decline has reached 21%.

Despite the upcoming October Golden Week holiday, pork consumption is recovering slowly, while oversupply is expected to persist. The report added that wholesalers and retailers are not stockpiling pork on a large scale as they have in previous years.

The Chinese government's efforts to support pork prices also appear to be ineffective. Authorities have pressured major pig farming companies to cut production in order to resolve the oversupply and support prices.

In a report this week, Guangda Futures noted, "Although pork consumption improved somewhat in September, supply remains sufficient," adding, "Therefore, it will be difficult for prices to rebound significantly in the fourth quarter."

According to official Chinese government statistics, as of the end of August, the number of breeding sows stood at 40.38 million, a decrease of only 0.1% compared to the previous month. The most actively traded live hog futures on the Dalian Commodity Exchange continued to weaken even after falling as much as 3% during trading on September 29.

In a recent report, Chinese commodity consulting firm Mysteel stated, "There are many opportunities for pork consumption to increase during the holiday period, so the downward demand may gradually materialize," but added, "There is not much time left."

Meanwhile, as China's Consumer Price Index (CPI) recently turned negative, raising concerns about deflation (a decline in prices amid economic slowdown), the government has stepped up efforts to manage prices. China's CPI for August fell 0.4% year-on-year, a sharper drop than the market expectation of -0.2%. In particular, food prices (-4.3%) led the decline.

This content was produced with the assistance of AI translation services.