China will again purchase pork from local producers and traders for the nation’s reserves to try and boost ailing hog prices, as concerns mount over deflationary pressure on the world’s second-largest economy.
Beijing has already conducted two rounds of pork buying for its stockpiles this year to try and stabilize the market. Hog prices jumped in July after a previous announcement by the National Development and Reform Commission for more purchases, before prices started trending lower again from early August.
The NDRC and other relevant departments will start to collect and store pork for reserves to lift prices to a reasonable level, the nation’s state planner said in a notice issued on its official WeChat account on Friday.
China’s hog prices have been under pressure this year due to ample supplies and sluggish demand, with millions of pig farmers — both smallholders and large corporate companies — struggling to make a profit. Typically, pork consumption should rise over the winter months as people make cured meat and celebrate festivals, but there are concerns that demand may be softer than expected.
Hog futures futures traded on the Dalian Commodity Exchange were at 15,380 yuan a ton as 2:17 p.m. Shanghai time on Friday, down more than 20% from a year ago. They slipped as low as 14,070 yuan in early February.
