China’s economic planning body, the National Development and Reform Commission (NDRC) has encouraged hog breeders across the country to maintain their current sales pace even though prices for pork and live hogs fell recently.
During the second week of November this year, the year-on-year growth of average pork prices in China has retreated back to 30-40% compared to previous week when the YoY growth rate was above 40%.
Hence, the alert for “excessive price increase” has been reduced, said NDRC on Tuesday.
Live hog prices in the country have also slipped to a three-week low at 26.87 yuan/kg ($3.81/kg), according to data from the Ministry of Agriculture and Rural Affairs.
Nevertheless, NDRC continues to urge hog breeders to maintain current sales level as live hog prices are still at a high level regardless of recent price correction.
Even though the average hog price nudged lower last week, it is still hovering at the highest level since late March this year, prompting more intervention measures from NDRC.
The commission has organized at least six rounds of pork reserve auctions this year so far to inject additional supply in the domestic market, hoping that prices could fall.
But the volume of pork reserve sales was minimal compared to a market with a production capacity of 55 million tons a year.
Major hog breeders were holding back sales between March and June to push domestic prices higher so that they can widen their profit margins which had been negative since the second half of 2021.
However, the action faced strong backlash from the Chinese government who began to intervene in July and asked companies to sell their herds to maintain a stable market supply.