Pork prices in China are crashing to multi-year lows as the world's 2nd-largest economy grapples with deflation
Reuters/Claro Cortes IV
- Pork prices in China have tumbled to their lowest mark since April 2022, Bloomberg data shows.
- Softening prices on China's most popular protein are the latest warning sign China is dealing with deflation.
- Beijing announced in November it would buy pork for its strategic reserves, but that hasn't stemmed the price drop.
Pork prices in China plunged more than 6% last week to hit its lowest level since April 2022, according to Bloomberg data.
In its third cycle of purchases for the year, Beijing had said in November it was buying up more pork for its strategic reserves, but that hasn't prevented prices from falling. At the same time, per Bloomberg, authorities have requested farmers to sell hogs as soon as their ready rather than hoarding them.
Falling pork prices signify the latest indicator that China's yet to escape concerns around deflation and wobbly economic growth.
The country's consumer price index fell 0.5% year-over-year in November, the national statistics bureau reported on Saturday, a weaker-than-expected reading and the most significant slide since November 2020. An official from the People's Bank of China pointed to softening pork prices as a primary drag on consumer prices.
Not long ago, as China was preparing to unwind pandemic lockdowns, global strategists were anticipating booming demand and an economic rebound. Yet mountains of debt in the real estate sector, low consumer optimism, unfavorable demographics, and more have all prevented the economy from seeing a post-COVID boom in growth and activity.
China's agriculture ministry said last week that pork consumption over the coming spring holiday season will remain weak, while hog output should climb.