On September 18, National Development and Reform Commission (NDRC) said that the price of pork rose significantly, driving the price of food to also increase significantly, affected by factors such as the African hog cholera. But excluding the core CPI of food and energy prices, the price of pork in August rose by 1.5% year-on-year, with an average increase of 1.7% from January to August.
According to recent monitoring, pork prices tend to be stable. From September 11 to 17, the average daily increase of pork retail prices in 36 large and medium-sized cities was 0.28%. The rise was significantly narrower than that in August. On September 14, the second day of the Mid-Autumn Festival holiday, pork prices dropped by 0.22%. The price in 10 out of 36 large and medium-sized cities rose, while 13 fell and 13 remained stable. Fruit and vegetable prices fell slightly. On September 17, the average prices of fruits and vegetables fell by 3.2% and 2.2% respectively compared with those of the end of August.
With the National Day approaching, price trend analysis shows that during the National Day holiday, prices are expected to continue to run smoothly. National Development and Reform Commission will continue to monitor closely the price changes of important commodities for people’s livelihood with relevant departments, and take appropriate regulatory measures in time to maintain basic price stability.
In addition, there is latest good news about the domestic pork supply.
According to the news released on the website of the China Merchandise Reserve Management Center, 10,000 tons of frozen pork from the central reserves will be put into the market through auction trading. The trading time is from 13:00 p.m. to 16:00 p.m. on September 19. The trading floor price is to be announced in the electronic system of the SAFE during the trading period.
It is said that, in fact, the local pork reserve has begun to be put in.
During the Mid-Autumn Festival, the Guangdong Provincial Food and Strategic Reserves Administration of Guangdong Province and the Department of Finance of Guangdong Province organized the release of 1260 tons of frozen pork at the provincial level to increase the pork supply in the festival market.
Since September 14, Hainan Province has put the second batch of frozen pork in reserve at provincial level into five cities and counties, including Haikou, Sanya, Danzhou, Wenchang and Baoting, to ensure market pork supply and stabilize prices.
On the same day, a batch of cheap pork stockpiled by the government in Zhejiang Province began to be put into supermarkets in Hangzhou, at a price 30% cheaper than that of pork in farms.
According to a reporter’s visit to the Century Lianhua Peace Plaza in Hangzhou, it was found that compared with usual, the one-time purchase volume of citizens increased significantly.
Jinan began to put 1500 tons of frozen pork in reserve on September 12. The pig’s foreleg meat before was 26.3 yuan a kilogram; now the selling price of the reserve pork is 16.2 yuan per kilogram, which is 10 yuan cheaper.
In addition, in Shanghai, some standardized market have introduced the sale of pork at par price. The average price of pork is 18.5 yuan per kilogram, which is 20% – 30% lower than the market price. Each person can buy two kilograms per day before sold- out.
According to the analyst Wei Zhenya from TF Securities, since August last year, African hog cholera has continued to spread in China. According to the data from Ministry of Agriculture and Rural Affairs, by the end of August this year, the number of sows in China decreased by 9.1% month to month, and decreased by 37.4% year on year. The decrease of sow capacity is the first time in history, which is the reason why the prices have risen rapidly. The current pock price has risen by about 150% compared with the beginning of the year.
The supply of pork is generally lagging behind that of sows for about ten months. Therefore, it is believed that the market in the coming year, the price trend is probably still upward.
Wei Zhenya said that the recent stock price performance is not very good, mainly because of the impact of the hog cholera, including the pressure of enterprises and other factors. The short-term livestock production of most enterprises is not ideal, which is probably the main reason that suppresses the recent stock price.
Wei Zhenya also estimated that in 2020, the operating profit of pigs in China may reach or even exceed 1,500 yuan per pig. And from the listed company’s livestock production, despite the short-term impact, it is expected that in 2020, the number of listed companies should also maintain a relatively high growth rate, thus driving the high growth of profits, with the recovery of the company’s production capacity,.