Porks on Reserve - Nicole Pabello Reports

In the last decade China experienced a growth in its middle class and a uncommon side effect was reflected in the price of pork. As the Chinese had more money to spend their purchasing habits shifted, which led to higher demands for meat, particularly pork.

 

In 2007 several major events led to an abnormal increase in the price of meat (specifically in  pork) as a result of lower offer.

According to The Economist, an estimated 45 million pigs died in China because of an outbreak called “Blue Ear Pig Disease.”

China’s economic dependency on pork production was so high that as the pork prices rocketed; the annual rate of increase of the consumer price index. That is now commonly called the “consumer pig index.” The relevance of pork price affects the overall index.

 

The price of pork directly relates to the price of grains; soy meal and corn. For every three kilograms of grains it produces one kilogram of pork meat. In 2007 the hike of food prices was linked to the poor crops and the ethanol’s rise in prices.

In 2007 atypical slumps in production came as a result of the eminent impact that pork price has in the consumer behaviour and the food price index. The government started the reserve of pork. The goal was to keep the pork prices stable, the government releases the necessary stock of pigs into the market if its too expensive or buys more reserves (frozen and live) to keep the producers and the market with profits.

Feature photo retrieved from Foxbusiness.com

Sources:

http://www.stats.gov.cn/english/

http://www.forbes.com/sites/sap/2015/09/09/who-is-feeding-chinas-half-a-billion-pigs/#259ca5f6b3b0

https://publicpolicy.wharton.upenn.edu/live/news/644-chinas-astounding-appetite-for-pork-recent-trends

http://www.economist.com/news/christmas-specials/21636507-chinas-insatiable-appetite-pork-symbol-countrys-rise-it-also

Earth Policy Institute from U.S. Department of Agriculture, Production, Supply and Distribution, electronic database, at www.fas.usda.gov/psdonline, updated 10 April 2012. ; and United Nations Population Division, World Population Prospects: The 2010 Revision, CD-ROM Edition (New York: April 2011).

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