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Price hikes for meat, eggs to affect CPI in China
Latest Updated by 2007-05-24 15:26:26
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Prices of pork and eggs kept soaring over past weeks on Chinese market due largely to tightened supply and increasing production cost.

Sources with the Ministry of Agriculture said on Wednesday that if the prices remain high, the country's consumer price index (CPI), a major indicator for inflation, will be affected. CPI reached the alarm level of three percent in April.

Food products account for 33 percent of CPI in China, and meat, poultry and related products, about 20 percent.

According to the Ministry of Agriculture, in April live pigs nationwide were priced 71.3 percent higher than a month earlier, and pork, 29.3 percent higher.

In Beijing, price of slaughtered pigs went up more than 30 percent in recent days, while that of eggs rose to record high for past five years.

Wholesale price of pork in Shanghai has hit 16 yuan (2.1 U.S. dollars) per kilogram, a record high for recent 10 years, up 20 percent month-on-month.

The wholesale price was even higher in Hangzhou, capital city of east China's Zhejiang Province.

"I bought the pork at 17 yuan/km from a distributor on Monday, and the price kept changing day by day. I have no other choice but raise retail price," complained Jin Qiuhua, a local retailer, at a pork stand in a marketplace of Maolang Lane, Hangzhou.

"I've sold pork for more than 20 years, such a continuous price hike was only seen in 1994," said Lu Youzhong, another pork retailer in the city.

Along with temperature hikes, blue ear disease, also known as Porcine Reproductive and Respiratory Syndrome (PRRS), broke out among pigs in south China's Guangdong Province and Guangxi Zhuang Autonomous Region, causing many deaths and a large amount of pigs to be culled, according to the National Development and Reform Commission. Officials from the Ministry of Agriculture, which is in charge of agricultural production and animal husbandry, declined to make any comment on the issue.

The outbreak can be seen as an immediate cause of a short supply in the regions, which need to buy pigs from northern provinces, according to Xu Lianzhong, a senior economist with the price supversion center under the National Development and Reform Commission.

"This sent a strong signal for distributors to jack up prices," said Xu.

Xu said this had exacerbated the unbalanced supply and demand of recent years.

"Pig raisers kept making losses over the past couple years and they are reluctant to raise pigs. This led to a marginal decline in population of live pigs for the current year."

Still worse, edible oil and grains underwent price hikes at the beginning of this year, and feed prices followed suit. The mounting raising cost for pigs and poultry brought about price hikes for pork and eggs, according to Xu.

Grain prices, which are expected to be affected by a decline in output this summer, would continue to increase slightly in the coming weeks, boosting prices of pork and eggs, Xu said.

Price of eggs rose 30.9 percent in April, according to the Ministry of Agriculture.

Xu predicted that egg prices would soon stabilize as egg supplies could be replenished quickly, but it was unlikely that pork prices would fall in the next one or two months due to the longer production cycle.

However, Xu said, pork prices have already peaked and have little room to rise further.

Some government departments are reportedly dispatching inspectors to pork markets around the country to investigate price rises indicating growing official concern at the increases.

Sources with the Ministry of Agriculture said on Wednesday that the ministry is taking measures to ensure market demand for pork could be met.

Li Xizhen, head of market monitoring and regulation section under the Ministry of Commerce said, "The Ministry will follow closely changes on the pork market. National pork reserves will be used if it is necessary."

According to the National Bureau of Statistics, China produced 17.73 million tons of pork in the first quarter of this year, up three percent year-on-year, and recorded a population of 467 million live pigs, down 0.3 percent.

Editor: Yan

By: Source: China View website
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