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NDRC to boost pork reserve to check price decline

By Chen Dujuan (Global Times)

08:45, August 08, 2012

China's top economic planner and price regulator announced Tuesday it will start purchasing frozen pork from the market to increase national pork reserves in order to prevent prices from falling.

It is the second time in 2012 that the National Development and Reform Commission (NDRC) has announced a plan to stockpile frozen pork.

Pork prices began to slide since the beginning of the year and after the NDRC purchased frozen pork in the middle of May, the prices stabilized in June and July. However, due to high pork output capacity and the low summer season for pork consumption, the prices are heading downward again, the NDRC said.

Pork prices may remain low for a period of time, the NDRC said, advising pig farmers to adjust production according to the market situation so as to reduce losses.

The average price of pork was 20.01 yuan ($3.14) per kilogram Monday, about 30 percent lower than the same period in 2011, according to data released by the Ministry of Agriculture.

The prices of soybean meal and corn have been rising while the pork prices are falling, a female staff surnamed Liu at Rongcheng Minxing Cooperative for Pig Farmers in East China' Shandong Province told the Global Times Tuesday.

The local farm gate price of pork in Rongcheng dropped to 13 yuan per kilogram, compared with 20 yuan per kilogram a year ago, Liu said.

"Pig farmers could earn as much as 800 yuan on one pig last year when prices were unexpectedly high, but this year they have to incur a loss of 200 yuan on each pig. Therefore, many small farmers have given up pig farming and instead gone to work in cities," Liu said.

Due to a severe drought in the US, global corn output has dropped, pushing prices up. Labor costs are rising as well, increasing the burdens for pig farmers, said Gao Guan, deputy secretary-general with the China Meat Association.

As pork prices rose to a high level last summer, pig farmers increased hog numbers and more firms entered the market, which led to an increase in supply, Gao said. Wuhan Iron and Steel Corp invested 39 billion yuan in March in pig farming.

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