Pork Prices Drop, China’s Economy Worried!

Jakarta, CNBC Indonesia – Pork prices in China have fallen steadily in recent months. The price even drops before the New Year or Chinese New Year, which is the peak of Chinese consumption.

The sloping pork price is reflected in the futures price movement. At the end of last week, pork prices fell to US$ 77.83 per Lbs. This price range is the lowest in the last three months.

Referring to China’s inflation data, pork prices fell by 8.7% in December 2022 compared to the previous month. This decline was sharper than in November 2022, which was corrected by 0.7%.
Reported from Yicai Globalthe average pork price fell to around US$ 2.27 per kg in December 2022. This price fell almost 50% compared to October 2022.

The continuous drop in pork prices is of course a cause for concern. This is because the pork industry involves millions of Chinese citizens, ranging from breeders, butchers, to traders. With lower prices, their income can fall.

The drop in prices occurred just before Chinese New Year where the tradition of cutting and eating pork with the family is present.

As a result of the sharp drop in prices, pig farmers are now losing around US$ 44 per head whereas in the same period in previous years they could have made a profit of US$ 148 per adult pig.

The decline in pork prices was caused by a number of factors ranging from decreased demand, supply enough, to increase the spread of Covid-19.

Pork sales plunged to around 64,000 tonnes in December 2022. Those sales fell by nearly half compared to the same period last year.

“Pork consumption may have passed its lowest point but prices have not yet reached their lowest point. Prices can still fall,” said Rabobank analyst Pan Chenjun, quoted from Time.

The decline in pork prices was caused by a number of factors ranging from reduced demand, sufficient supply, to the increasing spread of Covid-19.