International feed prices major contributing factor, say experts
China’s pork prices are expected to continue rising in the second half of 2012, due largely to global feed prices, according to Zheng Fengtian, vice president of Agricultural and Rural Development College, China People’s University.
Currently, the principal types of feed ingredients are corn and soybeans. However, due to the ongoing U.S. drought, many places that produce corn and soybeans have taken significant hits to production. The total output of soybeans, for example, may decrease by 20 percent to 30 percent in the latest harvest year, and China’s supply of soybeans relies primarily on imports. The future of China’s pork prices is currently very uncertain, say experts, as there is the possibility of large fluctuations that will lead to increases through the early months of 2013.
According to Li Guoxiang, the deputy director of the Rural Development Laboratory of the Academy of Social Sciences’ Macroscopic Economy Lab, the rise in pork prices will definitely influence China’s consumer price index. However, in the second half of 2012, the index will rebound. The four-season nature of pork prices is currently leading to a small rise, but as long as the increase is not large, the index will not be greatly affected. Even though pork prices are expected to increase, the elements that influence the consumer price index may decrease, thereby negating the effects of pork prices.