Chinese Pork Price Controls Lead to Imports

November 27, 2011 11:55 pm Last Updated: November 27, 2011 11:55 pm

Farmers and pig industry analyst in China are saying that the upshot of the regime’s price controls on pork—implemented after the cost shot up along with inflation beginning in May—are imports from other countries and subsequent pressure on local pig farmers, who now say they can barely make ends meet.

Chen, a pig farmer in Nantong, Jiangsu Province, said the price of live pigs has fallen more than 20 percent since September. Now pig farmers are having a hard time breaking even, she says.

“The first half of this year the pork price was very good and the farmers were able to make some money. The government tries to control the price… The price of live pigs is now so low that we are not making money. If the price drops even lower, we’d lose money. It was Premier Wen Jiabao’s idea to control the price. We don’t know when the policy will end,” Chen said.

Along with the drop in pork prices, imports have come in.

According to Securities Daily, China imported 82 million pounds of pork from the United States in September, the largest amount in the past 10 years. Based on an agricultural product report from the Ministry of Commerce, China imported 870,000 tons (1.9 billion pounds) of pork and pork byproducts from January to September this year, a 44.6 percent increase from same period last year. Most of it came from the United States, Denmark, and Canada. The total import value of pork went up by 700 percent year-on-year.

Jiang, the owner of a pig feed company in Shijiazhuang, Hebei, told The Epoch Times that according to his estimates and experience, about 30 percent of the pork on the market is now imported, which has had a serious impact on Chinese pork producers.

Chen has been raising pigs for seven years and owns 400 of them. She says that piglets are expensive, the price of pig feed has shot up due to rising grain prices, and that the cost of raising pigs is now high. With the occurrence of disease outbreaks, she says it’s not unusual to lose money.

A market observer told First Financial Daily that theoretically, the cost of raising a sow in the United States is less than half of that in China. Live pigs in the United States cost 9.5 yuan per kilogram ($0.67 per pound) and $0.81 per pound in Europe. They cost $1.2 per pound in China, 1.79 times that of the United States, and 1.48 times that of Europe, the article said. Even adding shipping costs and customs duties, U.S. pork can still sell less than Chinese pork in China, the market observer said.

Further, since there is no hog cholera or foot-and-mouth diseases in the United States, pig farmers have lower drug and veterinary costs; feed is also cheaper in the United States.

In response to the articles laying out those facts, netizens complained about why the Chinese regime won’t do more to help local farmers.

Read the original Chinese article.