China buys pork in the state reserve

China is starting to stockpile pork again as the government tries to keep prices under control. The Chinese Ministry of Commerce has just announced that it has purchased 30,000 tons of pork for its state reserves.

The announcement immediately caused pork futures prices to rise by 8%. In particular, prices for live pigs on the Dalian Stock Exchange rose to 15,285 yuan ($2,374.44 ) per ton at the end of Monday, October 11. This is the biggest increase since the creation of this market in January. It also represents the biggest jump in pork futures prices since the market crashed earlier in the year. Pig prices in China fell by 65% ​​in the first nine months of 2021.

Thus, the Chinese government is maintaining its strategy to support the price of pork after a collapse this year, which brought heavy losses to its producers. The data confirms that government hoarding of pork is contributing to the pricing strategy China was aiming for when it announced in June that it would use government reserves to try to stabilize prices after a big downturn.

At the same time, pork imports are expected to slow down until the end of the year, as domestic production in 2021 exceeded expectations.