Pork prices in some parts of China, the world's top producer and
consumer, have fallen more than 20 percent since August when the
fatal African swine fever hit the country's hogs, in a blow to
farmers.
It is not known how much Beijing would buy but the purchase would
support prices in areas that have not been able to sell their hogs
to places with demand, said Wang Zuli, chief expert on pig
production at the Ministry of Agriculture and Rural Affairs.
The plan was discussed by the ministry at a meeting on Monday to
discuss ways to ensure stable production of pork amid the African
swine fever outbreak, said Wang, who attended.
The ministry did not immediately respond to a fax seeking
confirmation of the stockpiling plan. It issued a brief statement on
Tuesday saying it had held a meeting with major pig producers to
discuss measures to stabilize pig output and secure pork supply.
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Yao Guiling, analyst at China-America Commodity Data Analytics, said
the ministry had proposed stockpiling, according to accounts of the
meeting by people present.
China consumes about 55 million tonnes of pork a year. It is not
known how much meat Beijing keeps in reserves.
It has in the past bought as much as 100,000 tonnes of pork for
state stocks when prices are low but purchasing usually happens
between March and May, when demand is weaker. Beijing has curbed its
purchases in recent years as part of a policy to reduce interference
in markets.
'OVERWEIGHT PIGS'
It is not clear when government purchases would happen but it will
likely be before the Lunar New Year festival, in early February
2019, said Wang.
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The move comes after more than 70 outbreaks of African swine fever
across China. The disease kills pigs and there is no cure or vaccine
against it.
Beijing has banned the transport of live pigs from regions infected
with the disease, fuelling a steep drop in prices in major
production areas in the north that usually sell pigs to other
regions.
Some farmers are raising their pigs to as much as 200 kilograms,
almost double the usual weight of a pig sent to slaughter.
"There are many overweight pigs. Buying for the reserves will
release the pressure and help with prices," said Wang.
The live pig price in northeast Liaoning province is currently 10
yuan ($1.44) per kg compared with 16 yuan per kg in southern
Guangdong province, according to data collected by China-America
Commodity Data Analytics.
Many pig farmers in the northeast have already begun to get rid of
their animals to cut their losses, said Yao, the analyst.
The government also urged major pig producers at the meeting this
week to diversify into slaughtering and increase processing capacity
closer to their farms, reducing the need for transporting live
animals, added Yao.
(Reporting by Hallie Gu and Dominique Patton; Editing by Manolo
Serapio Jr.)
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