Beijing pork prices shot upward again in October after officials pulled out all the stops to stabilize them ahead of the Oct. 1 National Day holiday. A comparison with Beijing market prices from the "blue ear" disease panic in 2007 shows that the African swine fever epidemic is the biggest-ever disruption of the world's biggest pork market.
Ministry of Agriculture and Rural Affairs figures showed a worsening supply situation. The Ministry reported that the inventory of swine during September was down 41.1 percent from a year earlier while the sow inventory was down 38.9 percent. The Ministry's figures tracking "above-scale" slaughter facilities showed the number of hogs slaughtered in September was down 35.8 percent from a year earlier.
Daily price data from Beijing's Xinfadi wholesale market show that pork prices stabilized in September following an August 30 order from Vice Premier Hu Chunhua to keep pork markets stable during the Mid-Autumn Festival and the 70th anniversary of the Peoples Republic of China celebrated October 1. Authorities injected 40,000 metric tons of pork reserves into the market last month. However, prices began rising the day after National Day and climbed 32 percent during the first two weeks of October, showing that officials cannot dictate prices for very long. The average price for a lean carcass at Xinfadi market was 21.75 yuan per 500g on October 15, up 125 percent from the price a year earlier in the same market.
Prices for different parts of the pig rose to varying degrees. Fatty carcasses have a lower price than lean carcasses, but their price on October 15 was 140 percent higher than a year earlier. Livers went up 120 percent. Prices for bellies and hindquarters were about double their year-earlier prices. Ribs were up 81 percent. Prices for other parts like tails, feet, kidneys, and brains rose by 30 to 60 percent from a year ago.
The historic nature of this year's pork price increases is evident from a comparison with the trajectory of prices in the Xinfadi market during 2007-08 when pork supplies were disrupted by a "blue ear disease" (Porcine Reproductive and Respiratory Syndrome) epidemic--China's previous most-notorious pork supply crisis which began the meme about pork prices influencing China's CPI.
The chart below compares the daily price for a lean carcass in the Beijing Xinfadi market during 2007-08 and 2019. Interestingly, prices in 2007 and 2019 began close to 17 RMB/kg in January of each year (with no adjustment for inflation). In 2007, the "blue ear" disruption of pork supplies caused rapid rises in pork prices beginning in April and May. The Beijing market's pork price reached 20 RMB/kg by August that year, 75 percent higher than the price in March. Prices eased in September-October before peaking at 22.5 RMB/kg in February 2008, more than double the March 2007 price. Those increases in pork prices were considered a serious crisis at the time.
During the ASF disruption in 2019, the Beijing market's pork carcass price was steady at about 20 RMB/kg in March-May, but the increases from August to October were much more dramatic than the 2007 pork price increases. Prices rose rapidly in August, stabilized in September--as noted above--and then rose dramatically in October. The October 15, 2019 price of 42.5 RMB/kg is the highest-ever in the Beijing market and up about 150 percent from the price on January 1. This pork shortage makes the 2007 event look like a blip in comparison--and the full effects have not run their course.
Ministry of Agriculture and Rural Affairs figures showed a worsening supply situation. The Ministry reported that the inventory of swine during September was down 41.1 percent from a year earlier while the sow inventory was down 38.9 percent. The Ministry's figures tracking "above-scale" slaughter facilities showed the number of hogs slaughtered in September was down 35.8 percent from a year earlier.
Daily price data from Beijing's Xinfadi wholesale market show that pork prices stabilized in September following an August 30 order from Vice Premier Hu Chunhua to keep pork markets stable during the Mid-Autumn Festival and the 70th anniversary of the Peoples Republic of China celebrated October 1. Authorities injected 40,000 metric tons of pork reserves into the market last month. However, prices began rising the day after National Day and climbed 32 percent during the first two weeks of October, showing that officials cannot dictate prices for very long. The average price for a lean carcass at Xinfadi market was 21.75 yuan per 500g on October 15, up 125 percent from the price a year earlier in the same market.
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| Average prices quoted by Beijing's Xinfadi wholesale market xinfadi.com.cn |
Year-on-year
pork price increases,
October 15, 2019
|
||
| Beijing Xinfadi Wholesale Market | ||
| Cuts |
Price,
Oct. 15, 2019
|
Change from a year earlier |
| Dollars per lb. | Percent | |
| Carcass (lean) | 2.78 | 125 |
| Carcass (fatty) | 2.53 | 144 |
| Belly | 3.26 | 104 |
| Hindquarters | 2.88 | 105 |
| Ribs | 4.29 | 81 |
| Feet | 2.69 | 40 |
| Tail | 5.12 | 60 |
| Ears | 3.26 | 31 |
| Brain | 5.12 | 60 |
| Stomach | 2.69 | 53 |
| Heart | 1.41 | 29 |
| Liver | 1.41 | 120 |
| Kidney | 3.71 | 61 |
Calculated
from prices at xinfadi.com.cn
Prices per 500g converted to dollars per lb. using exchange rate of 7.0868 RMB/$.
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The historic nature of this year's pork price increases is evident from a comparison with the trajectory of prices in the Xinfadi market during 2007-08 when pork supplies were disrupted by a "blue ear disease" (Porcine Reproductive and Respiratory Syndrome) epidemic--China's previous most-notorious pork supply crisis which began the meme about pork prices influencing China's CPI.
The chart below compares the daily price for a lean carcass in the Beijing Xinfadi market during 2007-08 and 2019. Interestingly, prices in 2007 and 2019 began close to 17 RMB/kg in January of each year (with no adjustment for inflation). In 2007, the "blue ear" disruption of pork supplies caused rapid rises in pork prices beginning in April and May. The Beijing market's pork price reached 20 RMB/kg by August that year, 75 percent higher than the price in March. Prices eased in September-October before peaking at 22.5 RMB/kg in February 2008, more than double the March 2007 price. Those increases in pork prices were considered a serious crisis at the time.
During the ASF disruption in 2019, the Beijing market's pork carcass price was steady at about 20 RMB/kg in March-May, but the increases from August to October were much more dramatic than the 2007 pork price increases. Prices rose rapidly in August, stabilized in September--as noted above--and then rose dramatically in October. The October 15, 2019 price of 42.5 RMB/kg is the highest-ever in the Beijing market and up about 150 percent from the price on January 1. This pork shortage makes the 2007 event look like a blip in comparison--and the full effects have not run their course.
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| Comparison of prices tracked in 2007-08 and 2019 from xinfadi.com.cn |
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