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China's pork price rebounds after government boost

Xinhua | Updated: 2013-05-23 09:54

BEIJING - China's price of pigs has bounced back following the government's subsidized initiatives, the country's top economic planning agency said Wednesday.

The average hog price reached 12.79 yuan ($2.1) per kilo by May 15, marking the third week of a rising trend.

The hog-to-corn price ratio, a major indicator of the industry's profitability, hit 5.33:1 by May 15, up from under 6:1 in early March, the break-even point for farmers, according to the National Development and Reform Commission (NDRC).

Due to the dumping of dead pigs into Shanghai's Huangpu River and seasonal factors, hog prices have fallen sharply since January. The hog-to-corn price ratio stayed under 6:1 for four weeks since early March.

In order to stabilize prices and prevent further damage to farmers' interests, the Chinese government has purchased frozen pork in more than 20 provinces since April at prices slightly above market costs, said the commission.

The NDRC suggested farmers watch the market closely and adjust their production plans to restore balance of the industry.

Food prices have a one-third weighting in the calculation of China's consumer price index, a major gauge of inflation, with pork prices being an important component.

Stabilizing pork prices is an important task for the government in taming inflation and deflation.

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