A worker puts out pork for sale at a supermarket in Yichang, Central China's Hubei Province on October 19, 2022. Photo: VCG

Chinese authorities on Friday stepped up efforts to stabilize pork prices with the release of 20,000 tons of pork from central reserves while reiterating their resolution to combat the fluctuation of pork prices.

A batch of 20,000 tons of pork from central reserves was released for bidding on Friday. It is the sixth batch of central reserves to be released by China in 2022. A total of 107,100 tons of pork have been released into the market in the past five rounds of issuance since September, Beijing News reported.

The issuance of the central pork reserve comes as China's National Development and Reform Commission (NDRC), the country's top economic planner, said that it would step up efforts to stabilize pig prices amid soaring pork prices.

NDRC said on its official WeChat account on Friday that all localities are required to increase the release of pork reserves in order to meet the demand for key festive consumption such as New Year's Day and Chinese New Year, and in areas where prices are too high.

The NDRC stressed that at present, pork reserves at the central and local levels remain sufficient, and there is a solid basis for dealing with the abnormal fluctuation in pork prices.

The NDRC said that together with relevant departments, it will guide the reserve regulation and market supervision to increase the supply of hogs and pork in the market and effectively ensure stable prices.

This is the third remark from the NDRC aimed at stabilizing pork prices in the past three consecutive days, as regulatory authorities sent strong signals that they would maintain the stable operation of the pork market.

The commission on Thursday summoned major domestic hog producers to discuss stabilizing the rapidly rising pork prices to further secure the market supply of the essential product, urging large-scale hog producers not to delay the live hog releasing date or collude in price speculation.

According to the NDRC, in the week of October 10-14, the average weekly retail price of lean pork meat in 36 large- and medium-sized cities rose by more than 40 percent compared with the same period last year, which triggered a first-level warning, the commission said in a notice on Wednesday.

According to the Ministry of Agriculture and Rural Affairs, as of 2 pm Friday, the average price of pork in the Chinese wholesale market came in at 35.67 yuan ($4.92) per kg, up 0.6 percent from Thursday.

With authorities accelerating the release of frozen pork reserves, there will be little room for further price increases in the future, experts said.

The remarks from the NDRC have sent clear signals to the market to stabilize pork prices, Wang Zuli, deputy researcher at the Institute of Agricultural Economics and Development of the Chinese Academy of Agricultural Sciences, told the Global Times on Friday.

As pork prices continue to rise, some farmers have become reluctant to sell their pigs, which has led to a tight supply in the market and price fluctuations, Wang said.

However, he noted that at present, pork prices have neared the highest level of the price-rising cycle, leaving little room for further price hikes. 

Although pork prices have fluctuated in the short term, it does not have the basis to see further substantial rises, as domestic pig production capacity has basically been restored to normal levels, Zhou Maohua, a macroeconomist at Everbright Bank, told the Global Times on Friday.

"As long as the authorities strengthen regulation and guidance of market supply and demand, the market will be basically balanced, and pork prices will not have a basis for a substantial increase," Zhou said.

Pork prices play an important role in China's consumer price index (CPI). In September, pork prices increased by 36 percent year-on-year, driving CPI growth by 0.45 percentage points, data from the National Bureau of Statistics showed.

Other categories from the domestic CPI show that domestic demand is recovering with the prices of grain, daily consumer goods, and services increasing moderately, reflecting ample supply in the domestic market for daily necessities and a solid foundation for domestic price stability, Zhou said.

Global Times