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China to release more meat from state reserves to secure supplies

China to release more meat from state reserves to secure supplies
FILE PHOTO: Vendors' pork stalls at a market in Hekou Yao Autonomous County, Yunnan province, China, May 3, 2019. REUTERS/Wong Campion/File Photo -
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BEIJING (Reuters) – China auctioned 10,000 tonnes of pork from state reserves on Thursday to secure meat supply during the National Day holiday, the country’s commerce ministry said, after disease ravaged the world’s largest pig herd.

Beijing also released 2,400 tonnes of beef and 1,900 tonnes of mutton from state reserves this month, according to a statement published on the ministry’s website.

Pork prices have jumped sharply recently and demand for the meat has fallen, the ministry said.

China to release more meat from reserves to ensure supplies & cool pork prices: https://fingfx.thomsonreuters.com/gfx/ce/7/6539/6521/ChinaPorkPriceSep192019.png

The ministry said it would continue to monitor supplies and pork prices while coordinating with other government departments to release meat from state reserves as required to guarantee supply in the market.

With a significant increase in meat imports and as the volume of frozen meat in reserves remains high, supplies are secured, it added.

Thursday’s auction was seen by analysts as a symbolic gesture, however, and unlikely to cool pork prices. Those eclipsed 40 yuan ($5.64) per kilogramme in early September, almost 80% higher than a year earlier.

“Our consumption is 12,000 tonnes a day,” said Ma Chuang, partner at Beijing-based consultancy Boyar. “It’s just a signal that the state is paying attention to the problem.”

But Ma agreed that there was plenty of frozen meat in storage, with high prices being driven by the shortage in freshly slaughtered meat – much preferred over frozen in China – not a lack of meat overall.

China celebrates its National Day on Oct. 1 with holidays lasting a whole week.

“During the holidays lots of people go travelling and eat out. The restaurants mainly use frozen meat so there won’t be a big impact,” said Ma, but he added that high prices were a longer-term concern.

Pork prices in the world’s top consumer hit record levels after an epidemic of African swine fever that has reduced the hog herd by around 40%.

The disease is not harmful to people but kills almost all pigs infected.

China’s pig herd shrank by 38.70% in August: https://fingfx.thomsonreuters.com/gfx/ce/7/6471/6453/ChinaPigHerdChangeAug2019.png

Beijing is rolling out measures to help recover pig production and secure meat supplies, especially during the holidays, when demand usually peaks.

China consumed about 54 million tonnes of pork in 2018 but volumes this year are uncertain because of the shortages.

(Reporting by Hallie Gu and Dominique Patton; Editing by Dale Hudson, David Evans and David Goodman)

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