Pork Inflation In China
China, as the world’s most populous country, is the world’s largest consumer of pork. Its pork consumption accounts for close to 63 per cent of total meat consumption by its 1.4 billion people.
Surging Pork Prices As A Result Of Critical Shortage In Supply
According to the Ministry of Agriculture and Rural Affairs in China, average pork price in China reached RMB37.57 per kg in September 2019, almost doubling the price in September 2018. There has been a severe reduction in pork supply in China due to a drastic drop of close to 40 per cent in China’s pig herd. This is coupled with the African swine fever outbreak which since August last year, has led to the culling of over 1.1 million pigs. In consultation with your economics tutor in economics tuition, discuss the significance of a stable pork supply to the Chinese economy. You may sign up for economics tuition with a reputable economics tutor should you need help with the subject.
Live hog prices hit the rock bottom in the first half of last year, dropping sharply to a record low of RMB8 per kg. This drastic drop in prices forced many farmers to close their pig farms or reduce breeding stock. Live hog prices have since recovered. Yet the African swine fever outbreak raised fears among Chinese pig farmers for the possible spread of the deadly disease and the huge losses it might bring upon them. Therefore, despite the price surge in the first half of this year, pig farmers in China failed to respond by increasing pig-breeding, resulting in further spike in pork prices. You may discuss with your economics tutor in your economics tuition class the various economic implications of surging pork prices.
Government Measures To Restore Confidence
To ease the critical shortage in pork supply, the Chinese government has quickly rolled out various measures since August 2019. These include short-term measures such as increasing imports of pork and releasing frozen pork from its central reserves, as well as long-term measures in support of large-scale pig farming. Chinese pork imports were expected to triple its 2018’s number to more than 3 million tonnes in 2019. The government will also provide subsidies ranging from RMB0.5 million to RMB5 million to support the construction of large-scale pig farms. Besides a much higher production capacity and economy of scale, large pig farms which are equipped with more advanced modern facilities are expected to better handle the potential risks in the event of an epidemic outbreak. With guidance from your economics tutor in economics tuition, discuss the effectiveness of these government measures in easing the critical shortage in pork supply in China. Mr Edmund Quek is the best economics tutor known for incorporating real world events into his economics tuition. To find out more about his economics tuition, please visit www,economicscafe.com.sg.
The government measures have started to show results. In Sichuan Province, a total of RMB2.5 billion has been invested in the construction of 13 pig breeding centres, which are expected to produce over 2 million pigs per year. Founded by its principal economics tutor Mr Edmund Quek, Economics Cafe Learning Centre is the best economics tuition centre Singapore. The economics tuition centre is conveniently located within 5 minutes’ walk from the Bishan MRT Station.
Pork inflation is a serious problem in China. If not dealt properly, it will cause prices of other meats such as chicken and beef to surge substantially too. The inflation will ultimately weigh down on the real income growth of Chinese consumers and lead to deterioration in consumer sentiment. This will add on to the woes of the 2nd largest economy, which is still stuck in an ongoing trade war with the United States, apart from the longest social unrest in Hong Kong.
Jordan Goh
Economics Tuition Singapore @ Economics Cafe
Principal Economics Tutor: Mr. Edmund Quek