Why Are Pork Prices Soaring? Ministry of Commerce Responds: It Is a Self-Correcting Behavior of the Market
On August 4, the Ministry of Commerce held a regular press conference, where spokesperson Shen Danyang responded to 11 hot and sensitive issues of great concern to domestic and foreign media. Among them, Shen Danyang answered questions about the relatively rapid rise in domestic pork prices since March of this year and how the Ministry of Commerce would ensure the stability of market supply and demand.
Shen Danyang said that domestic live hog prices had experienced a continuous decline for nearly two and a half years since 2013. After late March 2015, affected by factors such as a decline in live hog inventory, live hog and pork prices began to stop falling and rebound, and the hog-to-grain price ratio reached the break-even point of 6:1 in early June 2015. Over the past two months, live hog prices accelerated their rise, and the hog-to-grain price ratio reached 7.07:1, drawing considerable market attention. The Ministry of Commerce also intensified market monitoring and closely tracked and analyzed the situation.
According to what we have monitored and learned, the average live hog slaughter price in the first half of the year was 13.36 yuan per kg, up 3.3% year on year. By the end of June, the average live hog slaughter price of 300 large-scale breeding enterprises nationwide was 15.29 yuan per kg, up 24.9% from the lowest price point in March. Because the hog-to-grain price ratio fell to as low as 4.6:1 in 2014, breeding enterprises suffered severe losses. Therefore, on the whole, this round of live hog price increases is a correction of the sharp decline over the past two years and more, and is a self-correcting behavior of the market.
Judging from the statistical data on live hog inventory from the Ministry of Agriculture, live hog inventory is still at a relatively high level, and there will not be an obvious shortage in market supply. Nevertheless, in order to effectively ensure the supply of the pork market, the Ministry of Commerce has recently, together with relevant departments, studied how to do a good job in ensuring supply in the pork market and has prepared necessary measures. Next, the Ministry of Commerce will continue to intensify monitoring of the live hog market, and in particular will do a good job in ensuring the supply of the pork market during important holidays.