China pork prices rising over tainted meat, animal feed costs, supply shortages

Pork prices are likely to add challenges for the Chinese government to control increases in the consumer price index in 2011.

China's pork prices are rising due to pig producers' concerns over tainted meat, rising costs and supply shortages, according to reports.
Pork prices have risen to an average 15 Chinese yuan (US$2.31) per kilogram, up from nine yuan (US$1.39) in 2010. Recent troubles involving pigs being fed with banned lean-meat-producing drugs have worsened the country's existing supply shortage and pushed prices higher, said experts. China's supply of sows was at 47.3 million at the beginning of the year, 10% short of market demands, according to a report by Qilu Securities.
Rising animal feed and labor costs are also playing a significant part in keeping pork prices at higher levels during the second quarter of 2011. Corn and feed prices have gone up 15.56% and 9.68% higher, respectively, compared to their 2010 numbers.
Pork prices are likely to add challenges for the Chinese government to control increases in the consumer price index in 2011, said Yi Xiaoguang, president of the Comprehensive Economic Research Institute. When conditions are right, dropping pork prices lead to decreasing numbers of piglets, which leads to significantly rising pork prices for producers and consumers.